DNV GL: Oil Output Cuts Could See HFO Disappear by 2025

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According to DNV GL, an expected increase in worldwide gas supply coinciding with an expected cut in output from oil producers may lead to heavy fuel oil (HFO) disappearing from the market by 2025, Lloyd’s List reports.

In comments made last week at theConnecticut Maritime Association’s Shipping 2015 conference in Stamford, Gerd-Michael Wursig, DNV GL’s business director for LNG-fueled ships, hinted that the world may eventually adopt liquefied natural gas (LNG) more fully, having said that LNG has generally been cheaper than established bunker fuels, with that trend unlikely to change.

“LNG is the only clean fuel which is available worldwide on a large scale to meet the needs of worldwide shipping for the foreseeable future,” he said.

“LNG as a fuel has the potential to be price-competitive with oil as ship fuel.”

He noted that stricter sulfur regulations in the forms of Emission Control Areas (ECA) have also given shippers incentive to switch to gas as a marine fuel, with many shippers having spent an extra 0.5 percent to 1 percent on a ship’s price to optimise vessel designs for future LNG retrofits.

“Then you can be on the safe side,” he said.

Compared to the rest of the world, LNG has seen more progress in Europe, thanks in part to EU and national funding programmes such asTrans-European Network for Transport (TEN-T).

However, Aegean Oil (USA) managing directorAdrian Tolson that the same advances haven’t been seen in the U.S.

“A fuel supplier needs to pay a high capital cost to supply LNG bunker… [but] bunkering is a commodity business and very competitive,” he said.

“Unless there is significant government promotion, it’s very difficult [for LNG bunkering] to happen.”

Late last year, it was reported that usage of LNG as a mare fuel was also rapidly rising in China.

Source : http://shipandbunker.com/news/world/570164-dnv-gl-oil-output-cuts-could-...

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