Major players pull back from China LNG bunkering

By Li Xin 26 April 2017
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An LNG bunkering station in Chongqing. Players in the sector are scaling back their ambitions. (China Gas Holdings) An LNG bunkering station in Chongqing. Players in the sector are scaling back their ambitions. (China Gas Holdings)

Early backers of LNG bunkering in China – including some of the country’s largest gas suppliers – are scaling back their plans as the use of LNG as a shipping fuel is failing to live up to lofty expectations.

National supply companies such as China Gas Holdings, Kunlun Energy and China National Offshore Oil Corp. (CNOOC) have sought to create a new market for LNG in recent years by financing the construction of new ships or the retrofit of existing vessels to run on the fuel. Those efforts have floundered as low oil prices have stymied demand for LNG in the transport sector.

CNOOC built four LNG-fuelled tugboats in the cities of Zhuhai and Yangjiang, two of which ran solely on LNG while the others used dual-fuel engines, according to Yang Bo, a senior engineer at the company’s Energy Technology & Services subsidiary. Each of these vessels cost CNOOC RMB 80-90 million ($11.6-13.0 million), but they have not been heavily used.

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