The Canada LNG bunkering market is expected to grow at a CAGR of more than 5.25% during 2020 - 2025. The arrival of LNG powered vessels in eastern and western Canada, the economic advantages of LNG as a marine fuel, and stringent North American emissions standards are among the driving factors for Canada LNG bunkering market. Moreover, reducing the sulfur content from conventional fuel requires high cost, which is likely to hamper the economic viability of the same, in turn, hindering the growth of the market.
- Ferries & OSV are expected to dominate the Canada LNG bunkering market during the forecast period.
- The orders and deliveries of LNG-powered vessels are increasing, and the reduced natural gas prices in 2020 had marked the beginning of expanding opportunities for such vessels in the coming years.
- The restrictions on sulfur oxide (SOx) emissions is expected to drive the market during the forecast period.
Key Market Trends
Ferries & OSV to Dominate the Market
- Ferries are vessels used to carry cargoes across the water, offshore support vessels (OSV) are required during oil exploration and construction work in an offshore location.
- It is expected that the early LNG demand for marine vessels in Canada will come from ferries and other coastal traffic and offshore support vessels, following which other marine vessels are also expected to contribute toward LNG demand.
- In March 2019, the Canadian firm BC Ferries announced to build up to five new LNG powered ferries to replace four existing vessels, to meet changing travel demands into the future. The new ferries are expected to enter service in the mid-2020.
- Hence, the increasing number of LNG fueled ferries and OSVs and shift towards LNG fuel are expected to drive the demand for LNG bunkering facilities in the country over the forecast period.
Restrictions on Sulfur Oxide Emissions to Drive the Market
- In October 2016, the International Maritime Organization (IMO) adopted stricter regulations on emissions, most prominently restrictions on sulfur oxide (SOx) emissions, which came into force on the 1st of January 2020.
- With the new 2020 regulations, ships will have to use fuel oil with a sulfur content of no more than 0.50% m/m.
- Also, the Canadian government has made commitments for a significant reduction in greenhouse gases emissions, and the country has an abundant supply of natural gas.
- The LNG-fueled ships are expected to account for over 60% of the new ship orders. With the growing number of LNG-fueled vessels, the demand for the LNG as a marine fuel is expected to grow significantly during the forecast period.
- Hence, such developments are expected to fuel the demand for LNG bunkering services in Canada during the forecast period.
The Canada LNG bunkering market is consolidated. Some of the key players in this market include Royal Dutch Shell PL, Harvey Gulf International Marine LLC, Total SA, Nauticor GmbH & Co. KG, and Gasum AS.
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