China to Dominate Global LNG-Fueled Ship Market

Energy conservation and low carbon emission are the future trends in the global shipping industry. Regulations on emissions such as sulfur oxides are becoming increasingly stringent, and over the next 5 to 10 years, a large number of vessels will be heading towards the high seas. Currently, Europe, the United States, Japan, South Korea, and China are actively developing ships powered by LNG.

Since the "Glutra" became the first LNG-powered vessel to operate in Norway in 2000, marking the first use of LNG as ship fuel, the industry's adoption of LNG has been relatively short-lived. However, the number of operational, under-construction, and under-development LNG-powered ships is increasing, indicating significant progress in the development of LNG-powered vessels.

According to DNV GL's statistics from March 2015, there are currently 59 LNG-fueled vessels in operation and 80 new orders pending. Industry experts predict that the LNG-powered fleet will grow to 1,000 vessels by 2020. Energy giant Shell has also stated that by 2025, 25% of the global fleet will adopt LNG fuel to reduce carbon emissions.

The development of LNG as ship fuel has expanded from certain countries to a global trend. Over 400 LNG carrier vessels in the shipping market primarily use LNG as fuel. Vessels powered by LNG are already in operation in Russia, the Netherlands, the United States, Canada, and Australia. Additionally, gas fuel engines have been applied to various offshore facilities, such as FPSOs.

The United States is actively promoting LNG as marine fuel, with the Maritime Administration under the Department of Transportation leading a demonstration project involving a converted ocean-going container ship powered by LNG. Additionally, the Maritime Administration has invested in research on LNG fuel transfer, refueling, and infrastructure development, expected to be completed this year. As of November 2013, the total value of LNG-powered and LNG-ready vessels built in U.S. shipyards approached $3 billion, with $850 million in orders placed in November 2014 alone from subsidiaries of Crowley Maritime, Matson Navigation, and SEACOR Holdings. The total orders include 24 LNG-powered and LNG-ready vessels, with one ship being a firm option, with construction sites spread across the three coasts of the United States.

The establishment and continuous improvement of relevant regulations, standards, and infrastructure will make China the largest LNG-powered ship market globally. Currently, there are approximately 60 LNG-powered ships in operation in China, with the expectation to reach 100-150 by the end of 2015. According to the Ministry of Transport's plan, the scale of LNG-powered ships will exceed 1,000 by 2016. At the same time, the network layout of LNG refueling stations for ships in China is gradually taking shape, forming a two-horizontal, two-vertical, and eighteen-line LNG-powered ship refueling network, integrated with waterway distribution.

The development of LNG-powered ships represents a technological revolution in China's energy sector. It not only achieves low carbon emissions and energy conservation, but also holds significant practical importance for enhancing the economic benefits of ship operations, improving vessel performance, and boosting the core competitiveness of enterprises.

The third China LNG Carrier & Power Ship Conference, scheduled for September 16-17, 2015 in Shanghai, will provide the industry with a platform to learn about the latest developments, relevant industry standards and policies, connect with clients, and explore potential business opportunities. The conference invites authorities, ship owners, shipyards, classification societies, and technical equipment companies to delve into and exchange on hot topics such as policy and industry standard regulations, technological innovation and solutions, market challenges and development.