Rising Demand for LNG to Power Ships Expected in 2023

Demand for LNG to power ships is expected to rise this year due to more dual-fuel ships entering the global fleet, leading to attractive prices. In Singapore, LNG prices as marine fuel are showing significant discounts compared to conventional fuels, a shift from record premiums caused by a global gas crisis in 2022. Prices have stabilized at lower levels, with consulting firm Rystad predicting continued discounts until at least the third quarter of the year, barring major disruptions.

Global LNG bunker sales are on the rise, with forecasts expecting them to exceed 7 million cubic meters by the end of the year. Companies like BHP are taking advantage of the lower LNG prices, with plans to increase the use of LNG in their fleet due to cost savings and emissions reductions. The delivery of new dual-fuel vessels, such as container ships and tankers, is also expected to boost demand for LNG bunkers in the coming years.

Industry experts anticipate a significant increase in the number of dual-fuel LNG ships in service by 2027, calling for more investment in infrastructure, including barges for LNG delivery. While Singapore has three licensed companies for LNG bunker fuel delivery, infrastructure for LNG remains limited compared to traditional marine fuel facilities globally. Overall, the outlook for LNG as a marine fuel remains positive, with growing demand as more dual-fuel ships enter the market.

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