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LNG is a cleaner fuel than conventional marine fuels, such as heavy fuel oil, marine diesel fuel, and marine gas fuels. Bunkering is the process of transferring fuel to a vessel or a facility in the form of conventional marine fuels or LNG. The density of LNG is around half that of heavy fuel oil. Growing adoption of liquefied natural gas (LNG) as a bunker fuel and technological advancements in ship-to-ship LNG bunkering are the key trends witnessed in the LNG bunkering market. LNG produces lower sulfur content and greenhouse gas emissions than traditionally used maritime fuels, such as heavy fuel oil, marine diesel fuel, and marine gas fuel.
Based on end-user, the market is classified as tanker fleet, bulk & general cargo, offshore support vessels & ferries, and others. Offshore support vessels and ferries category holds a significant share in the market due to the increase in offshore production activities in recent years. The exploration activities are being carried out at more depths and in harsh environments, which will drive the demand for LNG Bunkering. Also, the use of FPSO (floating production storage and offloading) units has increased in recent years with an emphasis on offshore production at deeper levels.
The key market driver of this market is the stringent regulations imposed by governments on reducing the emissions of sulfur and nitrous oxide. This puts the LNG fuel in a more commanding position to be the most adopted fuel for marine applications in the coming years. Also, the rising shale gas production activities indirectly support the growth of the LNG bunkering market.
The key market restraint for the LNG bunkering market is the high initial investment required for creating the high-pressure storage and supply vessels for the movement of LNG. The cost of LNG transport is on a higher side as compared to liquid fuels. Also, the availability of alternatives to LNG for reducing the sulfur content, i.e., with the use of scrubbers, is restraining the market growth to some extent.
Key Market Driver -
Stringent government regulations over pollution and increasing adoption of LNG.
Key Market Restraint -
High initial investment can hinder the growth.
Some of the major companies in the LNG bunkering market include Gazprom Neft, Korea Gas Corporation, Harvey Gulf International Marine, Polskie LNG, Eagle LNG Partners, ENN Group, Skangas, Gasnor AS, Barents NaturGass, Prima LNG, and ENGIE.
The global LNG bunkering market is studied across different regions like North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. North America is anticipated to experience the fast-paced growth in the market with countries like the US and Canada, focusing on offshore production at ceratin locations around their country. Also, the increase in shale gas production activities drives the growth of the market. In Europe, countries like Norway, Russia, the UK are the major countries focusing on offshore production. The increased activities across the UK and Norway present opportunities for growth in the region. Asia Pacific countries like India, China, and Singapore are expected to drive the marine trade. The countries are also focused on framing stringent environmental regulations for reducing air pollution, which in return is expected to encourage LNG adoption as a marine fuel. Latin America and Middle East & Africa are expected to witness healthy growth with rising offshore production activities in countries like Brazil, Venezuela. The maximum number of FPSO’s brought into operation after 2016 has been highest in the Latin America region.
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