Strong growth expected in LNG bunker demand: Total

Amsterdam — Global demand in the LNG bunker market is expected to show continuous growth in the coming years, according to French oil and gas company Total.

LNG bunker demand is expected to reach 10 million mt a year by 2025 from only 1 million mt now, LNG bunker general manager at Total Marine Fuel Global Solutions Xavier Pfeuty said at the Global LNG Bunkering Summit in Amsterdam Tuesday.

While it is a relatively small part of the global bunker energy mix, investment in the sector is expected to grow in light of recent regulations introduced by the International Maritime Organization to cap the sulfur content of marine fuel at 0.5%.

According to Total, LNG bunker vessels will triple in number over the coming two years, with vessels able to cover the main maritime hubs, including Amsterdam-Rotterdam-Antwerp and Singapore.

In addition, as investment grows, the kind of standardization seen in more traditional bunker markets such as fuel oil will become a feature of the LNG bunker market, including in the area of health and safety, creating more confidence, Pfeuty said.

"Capex and technical improvement alleviate significant barriers in the LNG bunkering development," Pfeuty said.

By 2030, he said LNG would make up around 25%-30% of the global LNG bunker mix, adding there were signs of from some terminals in reducing tariffs on LNG arrivals.

Middle East prospects

Total is currently developing a project in the port of Sohar in Oman to provide a 1 million mt/year liquefaction plant.

The supply will come from onshore upstream gas reserves, Pfeuty said and would focus on development of LNG bunkering for Middle Eastern clients, with expected startup in 2023.

The Caribbean and Panama were also a potential growth area, according to Total.