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UAE must develop LNG bunkering hub

Khaleej Times logo Khaleej Times 13/06/2021 Sandhya D'Mello
a large ship in a body of water: UAE must develop LNG bunkering hub © Provided by Khaleej Times UAE must develop LNG bunkering hub

The ship owners have seen the benefits of Liquefied Natural Gas (LNG) as fuel and the order books clearly indicate that it is the fuel of tomorrow, said Capt. Manish Tyagi, chief executive officer, U2 Marine Services on the sidelines of his presentation at the CMMI Overseas Chapter webinar on Sunday.

The webinar focused on two topics LNG fuel as a bunkering project and Container ship Masters role in limiting liability and reducing risks - a mariners risk mitigation view and was attended by Captain Zarir Irani, chairman and board member of Constellation Marine Services; Sanjam Sahi Gupta, director Sitara Shipping; and Captain Satish Madhavan, Ex SCI, Sailing Container Ship Master.

Currently, the global shipping industry is going through a period of critical decision-making with exposure to difficult markets and new environmental regulations, pointed out Tyagi, who says sooner the UAE adapts for domestic vessels' consumption and or to develop as a commercial LNG bunkering hub, the better it will be.

The two predominant concerns of the industry are how to prepare for increasing fuel prices and how to meet upcoming emission regulations, especially those linked to fuel sulphur content? The way to move forward requires various stakeholders to adapt to strategic change with a positive attitude. Changing from coal to oil never occurred to maritime industry until the need arose to protect the environment. The maritime industry is again at the same crossroad and positive thinking today will provide a cleaner and safer tomorrow.

"Though there are several fuels covered within the IGF Code (International Code of Safety for Ships using Gases or other Low-Flash Point Fuels), use of LNG as marine fuel for deep-sea shipping to comply with the future emission requirements is one option from the available solutions," added Tyagi.

Growing focus on the expansion of gas pipeline infrastructure, along with increasing utilisation of natural gas for re-injection into oilfields to enhance oil production, declining LNG prices and implementation of favourable government policies is expected to boost demand for LNG in the UAE.

According to a report by Research and Markets, the UAE LNG market is projected to grow at a CAGR of 7.6 per cent during 2016-2021. The UAE is the third-largest importer of LNG in the Middle East and Africa region and various upcoming LNG terminal projects, surging demand for natural gas and cost-effectiveness in comparison with other alternative fuels are major factors anticipated to positively influence the LNG market scenario over the next ten years.

The LNG bunkering is developing worldwide in line with the increase of use of natural gas a fuel compliant with environmental legislation. Northwestern Europe has been witnessing LNG Bunkering since 2001 and this market has only increased ever since and now there are several LBVs (LNG Bunkering Vessels) operating within this area supplying LNG as fuels to IGF vessels. The supply of LNG as fuels by trucks is already a matured market within Europe. In the last few months, Far East regions have also picked up the pace (Singapore and Malaysia) and there is a small market within the US as well (growing slowly).

"There is a big potential of developing LNG bunkering market within the UAE. At present, there are around 200 IGF vessels in the water and around 300 IGF vessels on order. A large proportion of vessels carrying petroleum products passes through UAE waters, therefore, it only makes sense to develop LNG bunkering facilities at strategic locations such as Fujairah, Dubai, Mina Saqr and Khor Fakkan to name a few, either deploying an LBV (for larger vessels) or by LNG trucks (for smaller feeder, coastal vessels)," concluded Tyagi.

- sandhya@khaleejtimes.com

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