With the global push for decarbonization and stricter fuel regulations, demand for liquefied natural gas (LNG)-powered vessels is surging, driving growth in the LNG bunkering vessel market and intensifying competition between South Korean and Chinese shipbuilders.
LNG bunkering involves supplying LNG as fuel to ships using specialized vessels that store the gas in ultra-low temperatures and transfer it to LNG-powered ships at sea. These bunkering vessels are particularly valuable for ships that face challenges entering ports or require rapid refueling.
Recently, Chinese shipbuilders have made significant advances in the LNG bunkering market, further heightening competition with their S. Korean rivals.
According to industry sources, China’s state-owned Nantong CIMC Sinopacific Offshore & Engineering (CIMC SOE) delivered its second LNG bunkering vessel to Canada’s Seaspan Energy on Oct. 2024. The vessel, measuring 112.8 meters in length, 18.6 meters in width, and 5 meters in height, has a storage capacity of 7,600 cubic meters (CBM). CIMC SOE had previously secured an order from Seaspan in 2022 to build two LNG bunkering ships, delivering the first one in August this year. Furthermore, Seaspan has exercised an option for a third vessel, which is currently under construction.
In July, a subsidiary of China State Shipbuilding Corporation (CSSC), the world’s largest shipbuilder, delivered the first LNG bunkering vessel capable of operating on both seas and rivers. Chinese media reported that the vessel, which combines refueling and transport functions, boasts a percentage of locally sourced materials exceeding 85%, the highest among Chinese LNG ships.
“Chinese shipbuilders are enhancing their technological capabilities in premium vessels, increasing their competitiveness in the LNG bunkering sector,” a S. Korean shipbuilding industry insider commented.
The global transition toward low-carbon and decarbonization strategies has significantly increased the number of LNG-powered ships, driving demand for LNG bunkering vessels.
According to SEA-LNG, a UK-based LNG shipping association, there were 590 LNG-powered vessels operating globally as of last month, accounting for approximately 2% of the total fleet. This represents a 66% increase from 354 vessels in 2022. With 564 vessels on order, the number of LNG-powered ships is expected to grow to 1,154 by 2028.
However, there are only 60 LNG bunkering vessels currently in operation, roughly one-tenth of the number of LNG-powered ships. Even with the 13 vessels currently under construction, the total will only reach 73.
Meanwhile, the International Maritime Organization (IMO) has tightened sulfur content regulations for marine fuels, a move that is expected to further increase demand for LNG fuel. Beginning in May next year, ships operating in the Mediterranean, now designated as an Emission Control Area (ECA), must reduce the sulfur content in their fuel from 0.5% to 0.1%.
Therefore, LNG’s share of the marine fuel market, which stood at just 0.04% in 2021, is projected to rise to 7.8% by 2030 and 12% by 2050. French energy giant Total has stated that an additional 35 to 40 LNG bunkering ships will be needed by 2030 to meet growing demand.
Following this trend, S. Korean companies are also actively expanding their LNG bunkering vessel operations. In September alone, HD Hyundai Mipo Dockyard secured orders for three LNG bunkering vessels, accounting for nearly half of the eight global orders placed this year.
Korea Gas Corporation’s dedicated LNG bunkering subsidiary, Korea LNG Bunkering, conducted the country’s first simultaneous LNG bunkering operation in August. The LNG bunkering vessel Blue Whale supplied approximately 300 tons of LNG via ship-to-ship (STS) transfer to the French container ship CMA-CGM Visby while it was unloading cargo at Busan New Port Terminal 5.
In addition, POSCO International and SK Gas have also commissioned the construction of LNG bunkering vessels and are working toward commercializing LNG bunkering services.
https://www.chosun.com/english/industry-en/2024/11/19/5HR5B3RSA5HYTFQWEWXFK7AIEY/