LNG bunkering is the practice of providing liquefied natural gas fuel to a ship for its own consumption. The United States LNG bunkering market is expected to grow at a CAGR of more than 5.2% over the forecast period. The strict norms to restrict the sulfur content produced by conventional fuels are driving the demand for LNG bunkering infrastructure in the United States. However, high initial infrastructure development costs and competition from alternative fuels are likely to restrain the market for the LNG bunkering in the country.
- Ferries and OSV segment is expected to dominate in the United States LNG bunkering market over the forecast period.
- The increased production and the reduced natural gas prices in 2019 had marked the beginning of expanding opportunities for the market in the coming years.
- The growth of natural gas is expected to drive the United States LNG bunkering market during the forecast period.
Key Market Trends
Container Fleet is Expected to Dominate in the Market
- As of 2019, LNG bunkering in the United States takes place in two locations Jacksonville, FL, and Port Fourchon, LA-with a third facility under development in Tacoma, WA. The LNG facilities in these ports serve the relatively small United States-flag domestic market.
- Jacksonville is the largest LNG bunkering operation at a United States port. One bunkering facility at the port, developed by JAX LNG, initially began truck-to-ship refueling operations in 2016 for two LNG-capable container ships. In August 2018, upon delivery of the Clean Jacksonville bunker barge, the facility began to replace truck-to-ship bunkering with ship-to-ship bunkering. In the future, the barge plans to source LNG from a new, small-scale liquefaction plant which JAX LNG is currently constructing at the port.
- A second facility at Jacksonville’s port, operated by Eagle LNG, provides LNG bunkering sourced from a liquefaction plant in West Jacksonville. Taken together, the JAX LNG and Eagle LNG facilities is expected to establish Jacksonville as a significant LNG-bunkering location with the capability to serve not only the domestic fleet but larger international vessels as well.
- At Tacoma, WA facility, Puget Sound Energy has proposed an LNG liquefaction and bunkering facility at the Port of Tacoma, WA. Vessels traveling between Washington and Alaska typically spend the entire journey within the 200-mile North America ECA. Consequently, vessel owners operating along these routes have been interested in LNG as bunker fuel. TOTE Maritime, has begun the process of retrofitting the engines of two of its container ships to be LNG-compatible.
- The United States LNG bunkering market has followed its growth momentum from previous years, and the new emission standard from IMO is expected to significantly contribute toward the market growth. The Jacksonville port, which had limited experience of LNG, limited infrastructure, and a relatively small market share in marine fuel bunkering, has now grown toward becoming LNG bunkering operation leader in the United States, within a span of 3 years.
Increasing Demand for Natural Gas to Drive the Market
- The United States' natural gas production in 2019 was about 920.9 billion cubic meters, the highest annual amount recorded. The top five natural gas-producing states in the United States are Texas, Pennsylvania, Oklahoma, Louisiana, and Ohio.
- The key factors driving the LNG bunkering market in the United States are the increase in LNG demand to reduce carbon footprint in the shipping industry and the increased production of natural gas in the country. Furthermore, LNG is a better alternative fuel, and the government has been taking initiatives for LNG adaptation.
- The use of LNG allows for a significant reduction in sulfur oxide (SOX), nitrogen oxide (NOX), and carbon dioxide (CO2) emissions, thus offering ship owners and operators a sustainable solution to meet existing and future emission standards.
- If LNG producers in the United States can supply a significant share of this market, owing to low LNG production costs, compared to other countries. LNG bunkering could increase the demand for United States natural gas production, transportation, and liquefaction. Furthermore, increasing demand can also provide an opportunity for the increase in domestically-constructed LNG bunkering barges.
The United States LNG bunkering market is consolidated. Some of the key players in the market include Harvey Gulf International Marine LLC, NorthStar Holdco Energy, LLC, Royal Dutch Shell PLC, Conrad Shipyards LLC, and Crowley Maritime Corporation.
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Table of Contents
1.2 Market Definition
1.3 Study Assumptions
4.2 Market Size and Demand Forecast in USD billion, till 2025
4.3 Recent Trends and Developments
4.4 Government Policies and Regulations
4.5 Market Dynamics
4.6 Supply Chain Analysis
4.7 PESTLE Analysis
5.1.1 Tanker Fleet
5.1.2 Container Fleet
5.1.3 Bulk and General Cargo Fleet
5.1.4 Ferries and OSV
6.2 Strategies Adopted by Leading Players
6.3 Company Profiles
6.3.1 Harvey Gulf International Marine LLC
6.3.2 NorthStar Holdco Energy, LLC
6.3.3 Royal Dutch Shell PLC
6.3.4 Crowley Maritime Corporation
6.3.5 Conrad Shipyards LLC
6.3.6 JAX LNG, LLC
6.3.7 Eagle LNG Partners LLC