China's Nantong CIMC Sinopacific Offshore & Engineering (CIMC SOE), a shipbuilder based in the eastern Chinese port city of Nantong, has signed a construction contract with an unnamed European shipowner for a liquefied natural gas (LNG) bunkering vessel, the company said in an announcement last week.

The 6,000 m3 vessel will provide LNG bunkering services at European ports, a region that ranks among the world's most active LNG bunkering markets, with Rotterdam among its largest ship-to-ship supply hubs. That capacity places the newbuild in the small-to-medium size class of the fleet; the largest LNG bunker vessels in service exceed 18,000 m3.

CIMC SOE said the order strengthens its position in the small- and medium-sized LNG bunker vessel market and expands its presence in overseas clean-energy vessel markets. The company has been targeting LNG bunkering and clean-energy transport vessels, with the latest contract adding to its portfolio of green shipping projects.

The company has not specified when the vessel will be delivered.

Background: How LNG Bunkering Works

LNG bunkering is the transfer of liquefied natural gas to ships for use as fuel. Operations can be carried out truck-to-ship, shore-to-ship, or ship-to-ship, with dedicated bunkering vessels typically used to deliver fuel to ships at berth or in port without disrupting their schedules.

LNG has become one of the most widely adopted alternative marine fuels, as it burns with lower emissions of sulphur oxides, nitrogen oxides, and particulate matter than conventional oil-based bunker fuels. That adoption has been driven in large part by emissions regulation, notably the International Maritime Organization's 2020 global sulphur cap, which limits sulphur in marine fuel to 0.5%, alongside the IMO's strategy for reducing greenhouse gas emissions from international shipping. LNG's climate benefit remains debated, however, because of methane slip — unburned methane that can escape during engine combustion and along the fuel supply chain — a factor that European rules such as FuelEU Maritime account for when assessing the greenhouse gas intensity of marine fuels. As more LNG-fuelled ships enter the global fleet, demand for LNG is expected to grow, requiring more LNG bunkering vessels to support that demand.

Market Outlook

The global LNG bunkering fleet currently consists of 67 ships, with 42 more expected to join by 2029, according to data from DNV, the Norway-based classification society. With the delivery date for the CIMC SOE newbuild undisclosed, the order adds to an orderbook already set to expand the fleet by more than 60 percent over the next several years.

Reported by Ship & Bunker.