The Australia LNG bunkering market is expected to grow at a CAGR of more than 4.6% during 2020 - 2025. Factors such as increasing number of vessels using LNG owing to the need for cleaner fuels in compliance with the stringent government regulations in order to reduce air pollution and maintain sustainability are expected to be the major drivers that are boosting the growth of the market. However, the demand-supply gap among LNG bunkers and vessels is expected to hinder the growth of the market.
- Ferries and OSV segment is expected to dominate the Australia LNG bunkering market during the forecast period.
- LNG is a potential substitute according to IMO emission prerequisites, owing to its negligible sulfur content and low production of NOx contrary to fuel oil and marine diesel oil. Therefore, a shift towards LNG as an alternative fuel to conventional marine fuel is expected to create an opportunity for the LNG bunkering market in the near future.
- LNG bunkering infrastructure development is expected to drive the market during the forecast period.
Key Market Trends
Ferries and OSV to Dominate the Market
- Ferries are vessels used to carry cargo and passengers across the water. A passenger ferry is used as a water bus or water taxi to travel from one place to another. Various types of ferries include double-ended, hydrofoil, hovercraft, catamaran, roll-on/ roll-off, cruise ferry (RoPax), fast RoPax ferry, and others.
- These vessels majorly operate on heavy fuel oil and marine gas oil. However, government regulations regarding emission of sulfur, carbon dioxide, and other pollutants have been encouraging the use of LNG as fuel in the vessels.
- However, with the regulations related to sulfur content in the fuel, The option of using LNG as a fuel is attractive to these types of the vessel because of the operating profile as well as for economic, regulatory, and environmental reasons.
- Hence, the increasing number of ferries and OSV fleet is expected to drive the demand for LNG fueled fleet, in turn, driving the demand for LNG bunkering market in Australia during the forecast period.
Development in LNG Bunkering Facilities to Drive the Market
- Australia is expected to be one of the leading countries for the supply of LNG, whose demand is expected to witness a significant increase in the coming years. Establishing a strong LNG bunkering industry in Australia holds the potential to resurrect a domestic shipping fleet for coastal trading, utilizing LNG as a primary fuel source.
- In October 2018, the maritime industry in Australia announced that it is planning to adopt a greenhouse gas reduction strategy, which calls for a 50% cut to shipping greenhouse gas reduction emissions by 2050.
- The initiative arose out of a Gas Energy Australia (GEA) workshop and aims to establish LNG bunkering infrastructure at major ports.
- A joint industry partnership (JIP) was formed in 2018 to develop an LNG-fuelled 260,000-dwt Newcastlemax bulk carrier design that could operate in the coal and iron ore trade between Australia and China.
- With the significant domestic LNG production available and commercial LNG bunkering now taking place in Fremantle and Pilbara Ports, Australia is well placed to use LNG as a maritime fuel to comply with the regulations.
- Hence, such developments are expected to drive the LNG bunkering market in Australia during the forecast period.
The Australia LNG bunkering market is consolidated. Some of the major players in this market include Siem Offshore Inc., Gas Energy Australia, and Woodside Petroleum Ltd.
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