Asia LNG Bunkering: Developing Infrastructure To Meet Future Demand

Blog Article - March 19, 2021

Christophe Le Blan, LNG Bunkering Business Development Manager for Asia for Total Marine Fuels Global Solutions (TMFGS), was recently amongst a panel of expert speakers at CMT’s recent webinar, ‘LNG Bunker Supply Chain in Asia’. He shares his thoughts on Asia’s LNG bunkering infrastructure requirements needed to help meet future growth expectations.

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Accelerating interest for LNG-fuelled shipping in Asia

We are witnessing an increased interest in LNG bunkering in Asia. This is a reflection of rising global momentum for shipping companies to take positive action – now – to reduce their environmental footprint by using LNG, a cleaner marine fuel, as their solution choice.

Globally today, excluding LNG carriers, the orders for LNG newbuilds represent 16% of the current order book’s gross tonnage. 

To facilitate the uptake of LNG marine fuel, there has also been a worldwide growth of LNG infrastructure. Today there are 18 LNG bunker vessels in operation globally and the fleet will grow to 35 units offering an aggregated capacity of 8 million tonnes per year by early 2023. 

While this growth has primarily been in north Europe, the number of LNG bunker vessels are also increasing in Asia. 9 will be positioned in Asia to serve a capacity of 2 million tonnes per year by 2023.

Expanding Asia’s LNG bunkering infrastructure

Yet, with Asia’s rise in demand for LNG bunkering, there is room for new infrastructure development in this region, which will have to be decided in the coming years. 

Besides developing bunker vessels, building additional capacity in LNG terminal infrastructure - including storage tanks and reloading jetties - will also be necessary to ensure an adequate global LNG bunker supply chain to meet new market requirements. 

Compared to a lead time of 2 years that is required to launch new LNG fueled vessels, these onshore infrastructure developments typically need at least 3 to 4 years, with an integration of the sourcing-storage-delivery value chain to optimally serve the sector. 

What this means then, is that new infrastructure developments will need to be decided soon and completed by 2025, to ensure that the main bunkering hubs are ready ahead of the market switch.

Key considerations for new LNG bunkering developments

From the experience we have gathered in developing our own bunkering infrastructures, and taking into consideration the rapid development of LNG bunkering demand, we think it is important to adopt an integrated project approach when designing tomorrow’s LNG bunkering supply infrastructure. In particular, the following key considerations should be made: 

• Anticipating development ahead of market demand: do not wait until an LNG fueled vessel construction is decided before preparing for additional bunkering assets;   
• Ensuring global LNG source-to-bunker integration: with access to flexible and secured LNG sourcing from various sources of production; 
• The use of dedicated LNG (onshore-offshore) infrastructure adapted for flexible operations and scalable bunkering demand; and 
• Continued harmonization of standards and regulations. 

TOTAL: Bringing our integrated natural gas value chain to Asia 

At Total we saw the growing role of LNG as a marine fuel early and started planning for this move several years ago through a range of long-term investments in LNG infrastructure at key bunkering hubs.

Since November 2020, Total has been operating the world’s largest LNG bunker vessel, the “Gas Agility”, at the Port of Rotterdam. By 2022, the Company will launch a sistership in Marseille (France).

These bunker vessels are built to provide great flexibility in planning and adaptability to serve a range of small to large scale bunkering and fuel-transfer operations across different vessel types and segments. As in the case of the Gas Agility, it has also demonstrated capability in delivery bio-LNG via the Guarantee of Origin (GO) certificates mechanism. 

In Asia, TMFGS signed a 10-year agreement in 2019 to develop an LNG bunker supply chain in the port of Singapore. Through this agreement, Total is set to serve the port of Singapore via a third LNG bunker vessel, which will be launched this year. In February 2021, Total was also awarded a license from the Maritime & Port Authority of Singapore (MPA) to supply LNG in the Port of Singapore from 2022. These developments reaffirm the Company’s commitment to contribute to the country’s ambition in becoming a key LNG bunkering hub for Asia.

As the 2^nd largest LNG player globally, Total’s diversified positions throughout the LNG value chain, from gas production and liquefaction, LNG transportation and trading, to marketing strategy, allows us to provide customers with access to flexible and secured LNG sourcing, as well as to offer an adapted pricing structure for their specific needs. Additionally, customers can tap on the Group’s expertise and resources (including technical and regulation advisors, LNG experts, and strategic experts across our value chain) for end-to-end support and guidance on their fleet’s energy pathway for the long-term.

The bottom-line is: the future for LNG bunkering looks set to be a bright one with growing demand globally gathering at pace. To ensure we can reflect that demand now and in the future, infrastructure development cannot lag behind. 

Total will continue to explore new infrastructure development opportunities in key global ports, including Asia, to serve customers that have chosen LNG as the cleaner fuel choice. 
 

Christophe Le Blan, LNG Bunkering Business Development Manager for Asia, Total Marine Fuels Global Solutions

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