The continuing oil price volatility has impacted many fuel-dependent markets over the past few years.
LNG bunkering has been one of the areas affected by the drop in conventional fuel in the maritime industry.
Ahead of the LNG Bunkering Summit 2018*, organiser IQPC surveyed over 500 specialists involved in the LNG bunkering supply chain to gain a deeper understanding of how the sector is continuing to move forward in challenging market conditions; as well as future opportunities and trends in the coming years.
Taking the results over three annual surveys, it was found that there was a distinct increase in the number of respondents who thought that in general, LNG bunkering would increase.
For example, in 2016, 68% thought it would increase, for 2017 this figure had risen to 79% and for next year, it had gone up slightly again to 80%. For deepsea vessels, the percentages were 64%, 64% and 69%, respectively, while for the short-sea fleet the 2018 figure was 85%.
As to the question of the current low oil price affecting LNG bunkering expansion plans, in 2016 some 69% agreed, climbing to 83% for this year but interestingly, dropping to 59% in 2018.
The greatest hurdles were seen as initial costs at around 22% of the respondents for 2018, while infrastructure fell from 73%, to 56% to 46% in 2018. LNG pricing went up from 4% in 2016 to 13% in 2018, while funding was only a concern for 4%, having been at 25% in 2016.
Answering the question of what were the most important aspects, regulatory compliance came out on top at 37%, followed by profitability at 31%. Operational efficiency was next at 21%, followed by social responsibilities at 8%.
Respondents were then asked what would help accelerate growth. Lower costs came out on top at 37%, followed by technological advances at 25%, partnerships 20% and funding at 18%.
As for cruise ships, around 17% of respondents thought that this type of ship would benefit in 2018, up from 12% in 2017, but down from 21% in 2016.
Around 49% of the respondents thought that Europe would continue to drive LNG bunkering going forward next year.
IQPC said that these results demonstrated that the LNG market continued to mature and had adjusted well to the continuing low oil price.
The greatest challenge in the market remains the lack of infrastructure available, but as new projects enter the pipeline and infrastructure becomes operational, confidence has continued to build with significantly less believing this will be a hurdle.
In addition, investment costs are continuing to slow progress, but with 80% of respondents agreeing that LNG will become a widespread fuel for ships, the future looks increasingly positive for the coming years, IQPC concluded.
*LNG Bunkering Summit will be held in Amsterdam in January of next year.