Strong Iberian LNG Bunker Market Forecast by 2030

Norway's DNV GL forecasts strong potential future demand for LNG as a ship fuel in Iberia thanks partly to the cap on sulphur emissions from shipping; but there will need first to be major investment in infrastructure in Spain, Portugal and the Gibraltar Strait area.

DNV GL said in a study July 10 for CoreLNGas that results show that by 2030 up to 2mn m³/yr of LNG (equivalent to 0.87mn metric tons/yr, or the regas equivalent of 1.2bn m³/yr) will be bunkered by ships – with Spain's Algeciras, Las Palmas and Barcelona the busiest ports for such bunkering –  rising to four times that volume overall by 2050.

The 1.2bn m³/yr figure by 2030 equates to 3.5% of Iberia's 2016 overall gas consumption (Portugal 5.2bn m³/yr and Spain 29.8bn m³/yr)

But the study also concludes that existing LNG terminals will need to develop break-bulk capacity to allow for the loading of LNG to small carriers and LNG bunker vessels. In most ports, development of local intermediate LNG storage capacity will be needed, as demand from larger vessels grows.

Also small carriers for delivering batches of LNG to ports by sea will be needed. In order to supply the predicted LNG requirements in 2030, about €1bn  ($1.14bn) of capital investment will be needed across all these investment types by then. That figure increases to a total of €3.7bn to achieve the 2050 target.

Some of this investment has already begun in places like Barcelona. Cepsa for instance plans to launch a multi-fuel bunkering barge at the port in 2018. 

Core LNGas is a consortium of over 40 Spanish partners – including port authorities, ship and ferry operators and LNG suppliers – coordinated by Enagas, the Spanish gas grid and LNG terminals operator. Yet Iberia is a late developer, when compared with Norway which has been fuelling ships run on LNG since 2000, the rest of Scandinavia since 2010, and more recently Germany, Netherlands, Belgium, France and the UK.

Shell said a year ago that it plans to have developed a small LNG import and bunkering facility in Gibraltar, part of the UK, during 2H 2017.

In northern France, Dunkirk's LNG terminal and port signed an agreement July 4 to develop an LNG supply station at the port there.

Dunkerque-Port will support the EDF-led Dunkerque LNG import facility with the latter's undertaking to build and operate the supply station, as part of a larger project to set up a LNG provisioning service by land and sea in the port of Dunkirk in northern France. Like their Spanish counterparts, both French firms are convinced that LNG will cut carbon and particulate emissions at sea and on land. 

Mark Smedley