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Business case

Chicken-and-egg problem

High investment cost and uncertainty regarding supply, demand and fuel prices are hampering development of a market for liquefied natural gas bunkers. On the one hand, LNG shipping requires advance investments from ship owners, which need to be balanced by lower fuel costs at sea. On the other hand, a sufficiently detailed LNG bunkering infrastructure needs to be in place, requiring significant advance investments from the LNG supply industry.


The main stakeholders cannot develop their business cases separately, but need to take this interdependency into account. Ship owners need to be able to rely on adequate LNG bunker infrastructure, while short-term demand for LNG needs to be in prospect before such infrastructure can be developed. At the moment there is clearly a “chicken-and-egg problem.” Bunker suppliers are unwilling to invest in the required LNG infrastructure until such time as there is sufficient demand to supply commercial shipping with LNG fuel. On the other hand, ship owners are unwilling to invest in LNG-fuelled ships if supplies from LNG bunkers are hard to come by.


Available estimates of the number of LNG-fuelled ships likely to be in operation by 2020 show significant margins, depending on numerous variables, including fuel prices and bunkering infrastructure availability. Given these margins, it is hard for the two groups to develop successful business plans.


To overcome this chicken-and-egg problem, the European Commission has published a proposal for development of an EU-wide LNG bunkering network.

LNG for deep-sea shipping

A Lloyds Register survey among ports shows that the majority of ports are willing to prepare for bunkering deep-sea LNG-fuelled shipping over the next three to 10 years. The ports surveyed estimate that 11% of the deep-sea fuel mix will be LNG in 2030. For short sea shipping, this share of the fuel mix is expected to be even larger.