LNG Bunkers Remain Distant Reality for Australia

Despite predictions that Australia will become one of the world's top exporters of LNG by 2020, LNG bunkering in the country is said to be "still a way off."

Despite International Energy Agency (IEA) predictions that Australia will become one of the world's top exporters of liquefied natural gas (LNG) by 2020, the chances that the country will utilise the energy source as bunker fuel is "still a way off," says Banu Kannu, Marketing General Manager at Wärtsilä Corporation (Wärtsilä) for the Middle East, Asia, and Australia region.

"Bunkering possibilities are few and far between, if not non-existent," said Kannu, noting that infrastructure for LNG bunkering is lacking in the country.

Likened to a "chicken-and-egg" problem, it is said that investment in LNG bunkering facilities in Australia is unlikely to be put forth unless investors know that there will be enough LNG-fuelled ships to create necessary demand, while ship owners are cautious about converting their vessels to LNG propulsion unless bunkering is sure to be available.

Kannu says an absence of necessary environmental regulation and government support are the main source of the country's lack of motivation for the utilisation of LNG as bunkers, noting that Emission Control Areas (ECAs) and government incentives that exist in Europe and North America, making LNG a more financially attractive option against conventional marine fuels, do not exist in Australia.

"The players who would stand to benefit from it are all keen, willing and eager. We just need the decision-makers in Canberra, and the state governments, to push the button," said Kannu.

Teresa Lloyd, CEO of the Maritime Industry Australia Limited says low prices for conventional bunkers have also been dampening motivation for adoption of LNG bunkers.

"Simply put, the economics just don't stack up at the moment, and there's a lot of commentary out there saying that the economics aren't going to stack up for quite some time to come," said Lloyd.

"There's so much interest, it's hard to believe it won't happen. The question is when," she added.

In August, Wärtsilä announced that it would be providing dual-fuel engines for what it said is the world's first dredger to run on both LNG and conventional marine fuel.



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