- More participants to enhance transparency, competitiveness
- LNG bunkering prospects strong as other alternatives take time to develop
- Boost to LNG infrastructure via barges, additional supplies
The Maritime and Port Authority of Singapore is likely to grant additional LNG bunker supplier licenses to one or more companies by the end of 2024 to boost LNG fuel supply amid firm demand, industry sources said, reports SP Global.
New LNG bunker licenses
According to a source, a single new LNG license might initially be awarded, with the recipient getting some leeway in terms of time to acquire the LNG barge and commence operations.
Some potential awardees may be companies like Vitol, ExxonMobil and PetroChina, sources said.
Vitol declined to comment, while an ExxonMobil spokesperson said, “As a matter of practice, we do not comment on market speculation.” PetroChina and the MPA did not reply to enquiries for comment at the time of publication.
“Most of the [major companies] will be keen [to get the license], if there is an opportunity,” an industry consultant said, highlighting LNG as a primary fuel choice until other low- or zero-carbon fuels develop.
As the country’s LNG bunker fuel market gains momentum, a prominent bunker supplier in Singapore expressed interest in obtaining the license if the chance arises.
Currently, Singapore, the world’s largest bunkering port, has three licensed LNG bunker suppliers — TotalEnergies, Pavilion Energy and FueLNG.
Shell’s acquisition of Pavilion is set to increase its presence in Singapore’s LNG bunker market, creating opportunities for more suppliers to enter the sector, market sources said.
In June, Shell said it reached an agreement with Carne Investments, an indirect wholly owned subsidiary of Temasek, to acquire 100% of the shares in Pavilion Energy, with the deal expected to be completed by the first quarter of 2025.
New entrants would enhance competitiveness and transparency in Singapore’s LNG bunkering landscape and also increase bunker fuel supply capacity and infrastructure, the sources said.
LNG bunkering push
In the first eight months of 2024, Singapore’s LNG bunker sales soared over fourfold year on year to 300,653 metric tons, MPA data showed, reflecting the increased adoption of LNG fuel amid competitive prices and numerous environmental benefits.
LNG offers 20%-30% immediate greenhouse gas reductions depending on engine technologies, and the fuel can be incrementally decarbonized through bio-methane or bio-LNG in the near term and e-LNG in the longer term, according to industry sources.
The international order book for LNG-fueled ships stays strong, while the number of LNG bunker vessels is also rising.
In its “Maritime Forecast to 2050” report released in August, global classification society DNV noted a continuous increase in the number of ships that can run on LNG.
LNG-fueled ships represent 6.7% of the tonnage for ships in operation, while 36% of the tonnage in the order book can use LNG as a fuel, DNV said.
Softer LNG prices have also encouraged shipowners with LNG dual-fueled engines to increase its use.
In 2023, Singapore’s delivered LNG prices were $11.53/t higher than Singapore’s delivered Marine Fuel 0.5%S bunker price on the same heating value basis, Platts data from S&P Global Commodity Insights showed. However, over January-September 2024, LNG bunker fuel prices were $55.45/t lower than Marine Fuel 0.5%S, S&P Global Commodity Insights data showed.
Barge availability
According to industry sources, infrastructure bottlenecks may arise as the number of LNG fueled ships is growing more rapidly than the availability of refueling barges.
The high cost of constructing these vessels is a reason for the slow growth of the LBV fleet, sources said.
Singapore currently has three LNG bunker barges — FueLNG Bellina, FueLNG Venosa and Brassavola. The FueLNG Bellina and FueLNG Venosa are owned by FueLNG, a joint venture between Seatrium Offshore & Marine and Shell Singapore.
In July, FueLNG announced the successful completion of its 200th ship-to-ship LNG bunkering operation, with FueLNG Venosa delivering 9,000 cu m of LNG fuel to CMA CGM Bahia in Singapore in June.
The Brassavola, Singapore’s first membrane LBV, is owned by a subsidiary of Japan’s MOL and was chartered by Pavilion Energy. TotalEnergies Marine Fuels deployed the Brassavola to serve its customers under a long-term agreement with Pavilion Energy, the French energy company said.
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Source: SP Global
