A market study carried out by Norwegian classification society DNV GL has shown that there is potential for liquefied natural gas (LNG) to be used as marine fuel in the Iberian Peninsula.
One of the main obstacles regarding the accelerating interest and uptake in the use of LNG as a marine power source is the uncertainty regarding future market volumes of the fuel.
DNV GL carried out the study on behalf of the six-year CORE LNGas hive project. The research forms part of an initiative to drive the development of an EU-wide network of LNG refuelling points.
The €33m project has been coordinated by Enagas and co-funded by the European Commission (EC), and aims to provide an investment plan for LNG fuelling in Spain and Portugal.
The study has predicted the potential future demand for LNG as a ship fuel and has outlined the infrastructure that will subsequently be necessary for the areas around Spain and Portugal, covering the Mediterranean, Atlantic and Gibraltar Strait peripheral regions.
DNV GL's analysis of the results has also contributed to the CORE LNGas Hive project’s recommendations for the development of LNG supply chain infrastructure, which will involve more than 40 ports across the project area.
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Enagas CORE LNGas hive project coordinator Fernando Impuesto said: "The consortium partners selected DNV GL to execute the demand studies of the project based on the fact that DNV GL has been at the forefront of the development of LNG as a ship fuel.
"DNV GL’s network and market knowledge have added to a successful outcome. Through this market study we now have a strong decision basis to prepare the supply side on the Iberian Peninsula in meeting future demand for LNG bunkering at competitive conditions.”
The study has revealed a huge potential for the use of LNG as a marine fuel and recommends that the spare capacity of existing LNG import terminals should be utilised.
The consolidated quantitative results suggest that by 2013 up to two million square metres per year of LNG will be bunkered by ships, with the figure rising to eight million square metres per year by 2050.
Algeciras, Las Palmas and Barcelona have been noted as the most important ports for bunkering activities.
It is reported that about €1bn of capital expenditures (CAPEX) investment will be needed in 2030 in order to realise the predicted LNG supply chain, adding up to a total cost of €3.7bn in 2050.
DNV GL Oil & Gas senior vice-president Liv Hovem said: "DNV GL’s market study has clearly shown the major potential LNG has as a fuel in the region.
"We hope that the conclusions from our study will help ship owners, natural gas suppliers, bunker companies, port authorities and LNG terminal operators gain the confidence they need to move forward with LNG as a fuel for a more sustainable shipping industry.”