Knutsen orders LNG bunkering vessel for Mediterranean

Market: Natural gas
15/10/20

Norwegian shipowner Knutsen OAS has ordered a 5,000m³ LNG bunkering vessel to operate in the Mediterranean, Spanish shipbuilder Astilleros Armon told Argus.

The shipbuilder expects the vessel's construction to be completed "in at least two years", Astilleros Armon said.

Performing STS LNG bunkering operations in the Mediterranean is typically more challenging than in northwest Europe, with fewer bunkering vessels in the area, market participants said.

Most LNG bunkering services in Spain are truck-to-ship (TTS) operations, with ship-to-ship (STS) operations accounting for only 30 of the 195 LNG bunkering operations performed last year. TTS operations are less expensive than STS operations, but the cost of STS operations is gradually converging with that of TTS, market participants said. STS operations also refuel vessels more quickly, which makes refilling tanks of larger vessels such as cruise vessels more viable than TTS operations.

STS bunkering availability in the Mediterranean could rise in the coming years, with a major international firm in September having been poised to apply for a licence to supply LNG as a bunker fuel at the port of Gibraltar. Spain's Enagas also expects LNG to account for 3-5pc of bunkering demand at the ports of Algeciras, Huelva, Ceuta and Malaga by 2024. This share then is expected to reach 8-9pc by 2030, the firm said.

Small-scale supplier Avenir also plans to tap into the "growing activity" in the Mediterranean LNG market, with the firm expecting to take delivery of a 7,500m³ vessel by the middle of next year. The vessel primarily will supply a small-scale terminal in Oristano, Sardinia, but Avenir LNG also plans to supply other customers in the Mediterranean region, where a number of small-scale LNG terminals are being planned.

By Ellie Holbrook

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