The document provides an interim technical report on forecasting demand for liquefied natural gas (LNG) as a marine fuel in Portuguese ports. It first presents background on the research center and introduces the topic of forecasting LNG demand to reduce ship emissions. It then describes the methodology used, which involves analyzing ship traffic data from 2013 at the Port of Leixões and estimating LNG demand based on ship types, sizes, ages, trip durations and engine powers. The results section presents statistics on ship traffic at Leixões broken down by gross tonnage. It also shows calculations of potential LNG demand under various scenarios, such as if all or some ships were to use LNG. The report concludes by noting that

1. 1
INTERIM REPORT
Technical Report Nº3/2015
Forecasting demand of LNG as marine
fuel in the Portuguese Coast
Author: Aurélien Trotel
Supervisor: Tiago A. R. Santos
Lisbon, September 2015

2. 2
PRESENTATION OF THE RESEARCH CENTER
Thisinternshipwasmade duringmysecondyearat ENSIACET and I choose todo it ina researchcenterin
Lisbon. CENTEC,Centre forMarine TechnologyandOceanEngineering,isaresearchcentre of IST (Instituto
SuperiorTécnico),recognizedandfundedbythe Portuguese Governmentthroughthe Foundationfor
Science andTechnologyof the Portuguese Ministryof Science andTechnology,whichin 2015 classifieditas
excellent.
The Universitywasrankedsecondgloballyonoceanengineeringbasedonscientificpublicationsbetween
2008 and 2011. The centerCENTEC delivered152 publicationsduringthisperiod,anumberrepresenting
78% of IST publishedpapers.
CENTEC isorganizedinthe followingresearchgroups:
• Marine Environment
• Marine Dynamicsand Hydrodynamics
• Marine Structures
• SafetyandLogisticsof Maritime Transportation
My professorwasMr CarlosGuedesSoaresandI was alsohelpedbyTiagoSantosAssistantProfessor
Auxiliarexpertonmysubjectduringthe internship.

3. 3
INTRODUCTION
At firstI hada lotof scientificpublications,documentsandarticlestoreadaboutthisverynew subjectto
me : Maritime transportation.Ilearnedalotaboutthe differentcategoriesof ships,the latestnewsand
environmentregulationsinEurope andglobally,constructionof the ships,associatedcostsetc.The
professorintroducedthenmysubjectIwoulddeal withduringthe followingmonths:
“Forecastingdemandof LNG* as marine fuel in the Portuguese Coast”.
For thisstudyI had to reviewthe otherpublicationsmade onthe subjectinotherregions,Norwayfor
instance,andmake thenthe forecastforthe comingyearsforPortugal.In appearance simple the topicis
reallycomplex andabstract.
Due to newenvironmental regulations cominginanearfuture by the IMO (International Maritime
Organisation) imposingadecrease of sulphuremissionsgloballyforships,the stakeholdersmustconsidera
change from crude oil fuel toLNG, a marine fuel withnosulphurcontent.Nevertheless,touse LNGas a
marine fuel some installationsare neededandtechnologytoconstructnew enginesmustdevelop.
The goals of thischange for the mainactors are :
• Reduce emissions (SOx andCO2) fromshippingtominimize the impactof airpollutiononthe
environment,drivenbyregulationsandstakeholderexpectations.
• Findthe betteralternativestofitthe regulations,tominimize the price and respectthe constraints
concerningSOx.
• Understandthe needof stakeholdersinordertobuildtoshipsdesigned withdifferentconcept
engines.
The Portuguese coastiscomposedbythree mainports: Sines,LisbonandLeixões.Ourstudywill focuson
the port of Leixões,aportlocatednearPortoin the northof Portugal.
The projectleadsto the scientifictechnical reportbelow.
*LiquefiedNatural Gas

4. 4
Summary:
The EU has specified through a Directive that European seaports in the core network have until 2025 to be
able to provide LNG to ships. Inland ports have to be able to do the same by 2030. Portugal and the other
European countries have already studied at a preliminary level the feasibility of LNG bunkering using
differentmethods:portable tanks,small fixed tanks onshore (small scale LNG terminal), bunkering barges,
feeder/bunkeringtankers.The COSTA projectisanexample of this type of projects. Classification societies
are alsoactive inprovidingreviewsof existingfacilities,reviewsof technicalissuesrelatedtoLNG bunkering,
forecasts of demand for LNG as marine fuel.
Thisbodyof knowledgeallowsthe developmentof aneconomicfeasibilitystudyof providingLNGbunkering
inthe westerncoastof the IberianPeninsula.Inthiscoast,ina firststage,the ports where supplyisrequired
are Lisbon,SinesandLeixões,but AveiroandSetúbal mayalsobe requiredtoprovide thisfuel in the future.
Also,at leastone portin the AzoresislandsandinMadeirashouldbe covered.It is anticipated that the best
wayto provide LNG to shipsinthiswide areaisto use small-mediumsize LNGbunkertankers.Itisnecessary
to determine the demandrequirementsforLNG bunker in the mentioned ports. Therefore, the first task is
to forecastdemandforLNG in,for example,2020 and2030. This can be done usingstatisticsonshipscalling
in the ports mentioned above and estimating the uptake in LNG as marine fuel in the world fleet in those
years. There are already some forecasting studies on this matter that need to be taken into account. The
goal is to obtain estimates on the number of ships requiring LNG bunkering and the quantities of LNG
required per ship for each of the ports mentioned. These estimates will come in the form of positive or
negative scenarioscovering15yearsfrom 2015 onwards.Itis alsoto be consideredwhichforma probability
distribution for these scenarios could have.
The forecast would comprise a number of steps. First, the number of ship calls in each port needs to be
forecasted for 2020 and 2030. The ships then need to be sorted by types and sizes. An estimate of how
manywill runon LNG per shiptype and size needs to be made, as well as the percentage of those that will
performbunkeringinPortuguese ports(maybe assumedtobe the same of those carryingconventional fuel
bunkering).The average capacityof LNGtanksper shiptype andsize needsthento be estimated. However,
the fraction of these capacities that will actually be filled is largely unknown, constituting a major
uncertainty in this forecast. Finally, summing through all ship types and sizes and with the expected tank
sizes and loading fractions, a rational estimate of LNG demand per port may be developed.

5. 5
Contents
Summary:................................................................................................................................................2
1. Introduction .........................................................................................................................................6
2. Methodology........................................................................................................................................7
3. Results.................................................................................................................................................8
3.1. Evalutation of overall LNG demand..................................................................................................8
3.2. Forecast on global LNG demand....................................................................................................17
3.2.1. 2013, DNV, LNG for Shipping – Current status..........................................................................17
3.2.2. 2012, Lloyd’s Register, LNG-fuelled deep sea shipping..............................................................19
3.2.3. 2013, Ocean ShippingConsultants‘LNGasa BunkerFuel: Future Demand Prospects&Port
Design Options’...............................................................................................................................23
3.3 Forecast on demand for LNG in Leixoes ..........................................................................................24
4. Conclusion..........................................................................................................................................26
5. References .........................................................................................................................................27

6. 6
1. Introduction
The pointof thisstudyisto reduce the emissionsfromshippingto minimizethe impactof airpollutionon
the environment. Shippingisalarge and growingsource of the greenhouse gasemissionsthatare causing
climate change.Asa firststeptowardscuttingemissions,the European Unionandmore preciselythe
European Commissionhasproposedthatownersof large shipsusingEUportsshouldreporttheirverified
emissionsfrom2018. Newregulations,onsulphuremissionsinparticular,will be settledafterthisdate.
Some regulationsare alreadyenforcedinthe ECAsandglobally.Ourchallengeistoforecastthe needof LNG
(LiquefiedNatural Gas) toreplace crude oil inan earlyfuture todeal withthese regulationsandbe
economicallyinterestingforthe shipowners.
There are some interestingchallengesandadvantages of deployingLNGas a marine fuel :
- The technical challengesrelatedtoLNGas fuel have mainlycentredonafew issuesincluding:LNG
handlingandbunkering;andcontainmentsystemsonboard.LNG mustbe transported atverylow
temperature (-161°Cat the atmosphericpressure) andstoredincryogenictankswhichrequiremuch
more space than traditional fuel oil tanks,inthiswayspecial techniquesmustbe adoped.
- The environmentalbenefitsare significant.Use of LNGas fuel will reduce the NOx emissionsby
approximately90%,andthe SOx and particulate mattersemissionsare eliminated.The CO2
emissionsare about20% lowerbecause of the lowercarboncontentof LNG.However,the release
of unburnedmethane fromengines isachallenge,asthe greenhouse gaseffectof methane is
between20and 25 timeshigherthanforCO2.
Fuel costis the largestcost elementforvirtuallyeveryshippingcompanytoday.The regulatoryshifttowards
lowsulphurfuel isone of the developmentsinthe industrythatwill have the largestimpactintermsof
shippingcostsandoperations,andmayhave a strong impacton the ‘uptake’of new technologies.The
profitabilityforthe maritime industryisthe largestfactor asthe companiesconsiderfirstthe financial
aspect.
Thisdevelopment of LNGas a marine fuel forshipping hasmuchto dowiththe developmentof a
distributionnetworkandof the transport and availabilityof gasinLNG formin general. Althoughthe
numberof shipsusingLNG hasbeenincreasing,LNG enginesare notyetcommonlyusedoncommercial
vessels. Furthemore,the uncertaintyisdue tothe future price level of LNGwhowill conditionthe change
for crude oil to LNG as the most commonusedmarine fuel.
EuropeanCommission: “Emissionsfromtheglobalshipping industry amountto around 1billion tonnesa
year,accounting for3% of the world'stotal greenhousegas(GHG) emissionsand 4% of the EU's total
emissions.Withoutaction,theseemissionsare expected to morethan doubleby 2050. This is not compatible
with theinternationally agreed goalof keeping globalwarming below 2°C,which requiresworldwide
emissionsto be atleast halved from1990 levels by 2050.”
Will there be a significantswitchtoLiquefiednatural gas(LNG) as marine fuel ?What will the speedof
implementationbe ?What will be the demandinPortugal of LNGin an earlyfuture andthe proportionof
shipsusingLNG ?

7. 7
2. Methodology
Consideringagivenport,andforeach yearfor whichthere are statistics,itisnecessarytogo throughthe
followingsteps:
1. Identifyhowmanyshipsgointothe port.Classifythembytypesanddimensionrange.
2. Identifyforeachtype anddimensionrange the age distribution.
Age distributionstobe accordingwithUNCTAD data.
3. For eachtype,dimensionrange andage range:
a. Identifythe percentageof shipsthatwill carryoutbunkering(ingeneral,notnecessarily
LNG).
The current percentage of shipsdoingbunkeringcanbe used.
b. Identifythe percentagethatwill actuallycarryoutbunkeringof LNG.
Thisdependsonthe type of ships,dimensionsandage.Prioritytopassengerships,offshore
vessels,containerships,ferries.Prioritytosmallershipswithineachtype.Prioritytoyounger
shipswithineachtype anddimensionrange (onlyshipslessthan10 years).Thisdepends
alsoon the type of voyagesthe shipsare doing.
c. Identifythe capacityof the LNG tanks(fuel tanks) of the ships.
Use DMA and Port of Klaipeidadataontypical tanksizes.
d. Identifythe fractionof the LNGtanks capacitythat will be filled.
Thiscan vary,but due to safetyissues,whenbunkeringisdone the full tankcapacitywill be
filledinordertominimizethe numberof bunkeringoperations.
4. Sumthrough all type,dimensionrange andage range to obtainthe overall LNGdemand,average
amountof LNG perbunkeringoperation,numberof bunkeringoperations.
Havingsetup thisfor any givenyear,forwhichstatisticsexist,itispossibletorepeatforanyyear inthe
future the calculationsandforecastthe amountof LNG required.Variablesthatwill needtobe predictedfor
each yearinthe future will be:
1. Numberof shipspertype,dimensionrange andage range.
2. Percentage of shipsthatwill dobunkering.
May be assumedtoremainconstant.
3. Percentage of shipsdoingbunkeringof LNG.
Dependsonhow the worldfleetwillevolve.Thatis,dependsonthe LNGas marine fuel
uptake.
4. Capacityand fractionof tanks of LNG for each ship type anddimension.
May be assumedconstant.Thatis,capacity and loadingfractioncanbe assumedconstant.

8. 8
3. Results
3.1. Evalutation of overall LNG demand
On the firstpart of thisproject,we studythe valuesgivenbythe APDL(AdministraçãodosPortosdoDouro
e Leixões,SA) forthe Portof LeixoesinPortugal. Forthe year 2013, the data give the numberof shipsgoing
to the port and the type of ships accordingthe GT (Gross Tonnage).The choice ismade toconsiderforthe
studyevery classof GT withmore than 50 ships.Thisdecisioneliminates 7.9% of the fleetgoingtothe port
for thisyear.Asa result,amongthe 2551 ships,2350 are consideredforthisproject.
As a comparisontothe statisticsreleasedfromthe Equasisreport,we establish some diagramsto
understandthe type of shipscomingtothe port of Leixõesin2013, withthe initial datagivenbythe APDL.
Figure 1 : Number of ships coming to the port of Leixões in 2013 & repartition of GT
Figure 2 showsthat by number,the fleetcomingtothe port of Leixõesishighlydominated(95%) bymedium
sizedshipsupto 30 000 GT. Thisproportionissignificantandexplainsthe factthat79% of the gross
tonnage comingto the port of Leixõesiscarriedbymediumsize ships.Despite the low proportionof large
and extralarge ships (111 among 2351 ships),theyconveymore than20% of the GT in the port.
Thanksto the reviewof maritimetransportmade in2013 by UNCTAD (UnitedNationsConference onTrade
and Development),itispossible to include the age distributionfor the study.Forthis,we classifiedthe ships
infive categories: Oil Tankers, Bulk Carriers, General Cargo,Container Shipsand Others. The percentage
givenforthe age categoryof the shipsmultiplies the numberof shipsforeachGT category.The following
table showthe results.
GT Numberof ships GT
Small < 500 12 2923
Medium De 500 a 30000 2425 22 372 328
Large De 30 000 a 80 000 83 3 767 461
Extra Large > 80 000 28 2 377 655
Figure 2 : Ships coming in 2013 to Leixoes, ships organized by
size
Figure 3: Ships coming in 2013 to Leixoes, Gross tonnage carried by
size of ships.

9. 9
Table 1 : Statistics on age distribution and GT for ships coming to Leixões in 2013, using also UNCTAD data on age
distribution

10. 10
In thiscase,the blue zonesshowthe under 10 shipscategories,notconsideredforthe statisticsasthe
numbersare too low.To keep arelevantnumberof shipsineachcell,we calculatedthe wholenumber+1.
Regardingthe percentage of shipscarryingoutbunkering(ingeneral,notspecificallyof LNG) inthe portof
Leixõesin2013, we assume avalue of 10% (slightlylessthanthe value forKlaipeda). The same calculationis
made for eachcategoryand as a resultanumberof 236 shipscarry out bunkering.
To obtainthe total demand of LNG for all typesof shipsaccordingto differentGTrange for the Leixõesport,
we use a methodologybasedonthe powerof the ships.Here isthe detailedprocedure :
- Giventhe powerof the mainenginesforthe ships,we multiplythisnumberbya 85% load.
- We assume a trip fromthe port of Rotterdaminthe NetherlandstoCivitavecchia(Rome) inItalyatthe
speedof 14 knots.Thanksto the website sea-distances.org,the calculationof the durationof the tripis
made : 6 days and16 hours. Consideringastopat the portof Leixoeswe canassume a7 days trip.
- The powergenerated at85% ismultipliedbythe duration of the trip(numberinhours).Thiscalculation
givesthe amountof powergenerated forthe tripinkW.h
- We convertthese valuesinenergyrequiredforthe trip(Dataof the engine :10409 kJ/kWh).
- Then,knowingthe energycontentsof 53.6 MJ/kgthe massof LNG isknownfor the trip.
Takinga densityof 0.47 t/m3 for LNG, we obtainthe volume of LNGneeded,adding10% of additional
marginfor the generators.
- Plotm3 LNG againstGT and fromthat interpolation obtainthe size of tanksforthe shipsgoingintoLeixões.
We take the average shipGT withineachrange of GTs.
- Fromthere we obtaintotal demandif all shipswhere runningonLNGand alsodemandif onlya few are
runningonLNG.

11. 11
Table 2.1 : Calculation of LNG demand for all kind of ships and GT

12. 12
Table 2.2 : Calculation of LNG demand for all kind of ships and GT

13. 13
Distribution of LNG and Length / Length and Power / LNG and GT for the different categories of ships
Figure 4.1 : Distribution of LNG and Length / Length and Power / LNG and GT for the different categories of ships

14. 14
Figure 4.2 : Distribution of LNG and Length / Length and Power / LNG and GT for the different categories of ships

15. 15
Figure 4.3 : Distribution of LNG and Length / Length and Power / LNG and GT for the different categories of ships

16. 16
Thanksthe LNG againstGT graphs,we can assume the size of the tanks of the shipsgoingto Leixões port.
Withthe equationof the trendline andanaverage foreach GT classe,we obtainavalue of the capacity of
the tanks foreach shiptype andsize.
For the total LNG demandforthe port of Leixões,we donotconsiderFerries/Ro-Pax andOffshore,Fishing
Vesselsthe numberbeinginsignificants. Table4showsthe numberof shipscomingto the port of Leixõesin
2013. Theyare classifiedaccordingtoGT and the shiptype.
Table 4 : Number of ships coming to Leixoes in 2013, per ship size and type
Multiplyingthe numberof shipsgoingannuallytothe portof Leixõestothe demandof LNG pershiptype
and GT, we obtainthe followingresults:
Table 5 : Demand of LNG (m3 and tons) per ship type for 2013 in Leixões
These valuesconsiderthatall shipsare runningonLNG andcarry out bunkeringinLeixões.
Our estimationisanumberof 509 093 tons forthe year 2013 inLeixões.
10% kapleidareport
GT/Type Ship Cruise Ship Ferries/Ro-Pax CargoRoRo ContainerShips BulkCarrier Offshore Vessel Tugs FishingVessel Tankers
2500 710 631 39 182 147 701 540 344 214
3500 723 656 110 233 165 787 621 461 229
4500 736 682 179 284 182 866 663 559 244
5500 749 709 247 335 199 939 664 640 258
6500 762 737 313 386 217 1007 625 703 273
7500 775 766 377 437 234 1068 748 287
9500 802 827 501 537 268 1172 783 315
15000 880 1016 809 810 359 1336 391
25000 1032 1437 1245 1290 517 1169 521
Table 3 : Average LNG demand in m3 per ship type and GT

17. 17
3.2. Forecast on global LNG demand
Because future demandforLNG-fuelledvesselsisinfluencedbyamultitude of factors,moststudiespresent
a range of scenarios. Inthisreportwe analyze the three followingreports:
- 2013, DNV,LNG forShipping –Currentstatus
- 2012, Lloyd’sRegister,LNG-fuelleddeepseashipping
- 2013, OceanShippingConsultants(Royal Haskoning),LNGasa bunkerfuel:future demandprospects&
port designoptions
3.2.1. 2013, DNV, LNG for Shipping – Current status
Thisstudyis basedonfour scenarios,consideringthis3criteria:
- Economicgrowth
- Fuel prices(LNGand oil)
- Regulatoryandstakeholderpressure onthe environment
The four scenariosare detailedin figure5.The two mainfactors influencingthe studyare the economic
growthand the pressure onthe environment.
Figure 5 : Scenarios considered for the DNV study

18. 18
The assumptions made forthe fourscenariosare mentioned infigure 6.They are the critical inputsto the
simulations.
Figure 6 : Inputs and assumptions made for the simulation
The simulationmodelsare linkedwithfuel prices,technologycostsandspecificshipownercharacteristics
and made by DNV Researchpole thankstothe software ExtendSim.
Vesselsconsideredforthe studyandsegmentationmade withthe size are mentionedinfigure 7.The
simulationexcludeRoPax andPassengervessels.
Figure 7 : Vessels considered for the study and segmentation by size

19. 19
The fleetassessedinthisanalysisconsistsof nearly50,000 shipsfor2012, growingtobetween53,000 and
57,000 by 2020, dependentonselectedgrowthscenarios.The fleetisdividedinto13segments,covering
cargo carrying shipsandoffshore service vesselsabove 100gt in internationaltrade.
Resultsof the study
More than 1 in 10 newbuildingsinthe next8years (2012-2020) will be deliveredwithgasfuelledengines.
Case Scenario Consequence
LNG price 10% above heavy fuel oil (hFO) 7-8% of newbuildings will be able to run on LNG
LNG price goes down to 30% below hFO 13% of newbuildings
LNG price 30% below hFO (extreme case) 30% of newbuildings
Combinedwiththe global sulphurlimitenforcein2020 and the 20% EEDi reductionrequirement (Energy
EfficiencyDesignIndex,setscompulsoryenergyefficiencystandardsfornew ships),upto5000 LNG fuelled
shipsaccordingto scenarioB couldbe delivered.
DNV estimatesthat the demandfor LNG will be 8-33 milliontonnesin2020, dependingonthe scenario
selected.Itis the scenarioB that is would give the higherdemandfor LNG.
3.2.2. 2012, Lloyd’s Register, LNG-fuelled deep sea shipping
For thismodel,aproprietaryinteractivedemandmodel isused.Itpermittedtothe searcherstoassess the
likelyscale of demandforLNG-fuellednewconstructionandLNGas a fuel fordeepseashippingupto2025.
Four criteriaare considered forthisstudy:
- Timingof global sulphurlimitenforcement
- Widerimplementationof ECAs
- The propensityof shipownerstoadoptLNG as a fuel fornewbuilds
- Bunkerfuel oil andLNG bunkerprice forecasts
Timingof global sulphurmarine enforcement
The International Maritime Organization(IMO) hasadoptedmeasurestopreventairpollutionfromships.
From 2012, a global capof 3.5% on the sulphurcontentof marine bunkerfuel isfixedtolimitemissionsof
sulphurdioxide,aharmful pollutant.
From 1 January,2020, a global sulphurlimitof 0.5% in marine bunkerfuel oilsisexpected.However,this
date couldbe deferredto1 January,2025, dependingonthe outcome of furtherinvestigationbythe IMO
intothe global availabilityof low-sulphurfuel oil formarine use by2018.

20. 20
ECA zones
A distinctionismade betweenthe ECA zones (EmissionControl Areaszones) and the restof the worldfor
thisregulations.Fromthe 1st
of Januarythisyear,a limitof 0.10% isenforcedonthe ECA zones.
The ECAs are composedbythe North Sea countries,BalticSeacountriesandNorthAmerica.
Figure 8 : Enforcement of sulphur limits with respective timelines
Operatingonlow-sulphurdistillate fuelsisarelativelyeasywaytocomplywithfuel oil sulphurcontent
limits.However,if the worldfleetof commercial shipswastoconvertto usingdistillate fuel by2020, the
currentproductionof distillate fuel oil wouldnotmeetmarine bunkerfueldemand.
In thisway, Use of LNG as bunkerfuel forshipsrepresentsareal alternativetoconventional marinebunker
fuel oilswhenconsidering compliance withthis sulphurlimits mentionedabove because of itsvirtually0%
SOx contentinemissions.
Inputassumptionsmade forthe study :
Figure 9 : Input assumptions according to the 3 cases

21. 21
Results of the study
The three forecastscenariosforLNG-fuellednewbuildandLNGbunkerdemandare:
Base case scenario
– currentECAs anda 0.5% global sulphurlimitinbunkerfuel implementedfrom2020:
– 653 LNG-fuellednewbuilds forecastedforthe periodupto2025 (4.2% of global deliveriesfrom2012 to
2025)
Cruise shipsshowedthe highestlevelof uptake of LNGas a fuel at10.9% by 2025. Of the expectedtotal
global fleetof LNG-fuelledships,42% are expectedtobe drybulkcarriers,due to the size of global drybulk
carrier deliveriesexpectedduringthe period.
– LNG bunkerdemandisexpectedtoreach24 milliontonnes(MnT) by2025 for deepseatrades(1.5%of
global LNG productionand3.2% of global HFObunkerconsumption).
High case scenario
Main hypothesis : a 25% decrease onthe forecastLNG bunkerpricesusedinthe base case model anda 75%
increase inpropensityfornewbuildstoconverttoLNG-fuelleddesignsfrom2020-2025:
– 1,963 LNG-fuellednewbuilds forecastedforthe periodupto2025 (12.6% of global deliveriesfrom2012 to
2025)
Strongadoptionwithinthe drybulkcarrierand tankernewbuild sectors,due tothe factthat, highlevelsof
global deliveriesare expectedwithinthese segment. However, whenthe factorof uptake withineach
segment’sglobal deliveriesisconsidered,the oil tankerfleetdemonstratesthe highestuptakeof 23.5%,
followedbycruise shipswith15.7%,and containershipswith14.6%.
– LNG bunker demandis expectedtoreach 66 MnT by 2025 for deepseatrades(4.2% of global LNG
productionand8.0% of global HFObunkerconsumption).

22. 22
Low case scenario
Main hypothesis :a 25% increase inforecastLNG bunkerpricesusedinthe base case model and
implementationof global sulphurlimitsshiftingto2023. Sensitivitytestingindicatesthatshifting
implementationto2025 for the lowcase wouldgenerate azerodemandforLNG-fuellednewbuilds:
– 13 LNG-fuellednewbuilds forecastedforthe periodupto2025 (0.1% of global deliveriesfrom2012 to
2025)
In termsof shiptype uptake,the majority(58% – sevenships) are expectedtobe cruise ships,whichhave a
higherprobabilityof encounteringECAs.
– LNG bunker demandis expectedtoreach 0.7 MnT by 2025 for deepseatrades(0.001% of global LNG
productionand0.002% of global HFObunkerconsumption).
LNG bunkerdemandishighlydependentonLNGpricingand itscomparable price difference withcompeting
fuels,e.g.,currentandfuture alternative fuels,as well asthe date of implementationof global sulphurlimit.
Figure 10 : Cumulative global LNG fuelled newbuilds and LNG bunker consumption (base, high and low cases)

23. 23
3.2.3. 2013, Ocean ShippingConsultants ‘LNG as a Bunker Fuel:
Future Demand Prospects & Port Design Options’
The society OceanShippingConsultants,basedinEngland hasrecentlypublishedadetailedreportonthis
‘hottopic’withinthe maritime sector.Theyinvestigate on Future LNGBunkerMarketDevelopments due to
the newenvironmental regulationscomingintoforce duringthe nextdecade.
Currentlythere are approximately40tradingvesselsandthe currentorderbookcontainsapproximately30
vessels. These 40tradingvesselsaccount forlessthan0.1% of the overall mainoperatingvesselfleetof
over54,000 sea goingvessels.Itisexpectedthatthe up-take of LNG-fuelledvesselswill increase to
approximately1,250 vesselsby 2025, as highlightedinthe followingfigure:
ForecastLNG bunkermarketgrowthwill be relatedtothe numberandsize of vesselsthatwill use it.Initial
estimatessuggestthatLNGbunkerfuelswillincreaseto4.6m tonesby2025.
Figure 12 : Forecast Bunker Market Developments to 2025 (Million tonnes)
Figure 11 : Forecast Total LNG-FuelledFleet Development to 2025

24. 24
3.3 Forecast on demand for LNG in Leixoes
Based on data givingthe numberof shipsonthe total fleetinthe last10 years byThe EuropeanMaritime
SafetyAgency(EMSA),we made some extrapolationsupuntil 2025. The firststepwasto classifythe ships
accordingto theirsize.We dividedthemintotwoclasses:under500GT and from500 to 25000GT. Then we
calculatedthe increase betweeneachyearandworkedoutthe average forthe 10 firstyear inthe two
classesas well asforthe total.We appliedthisrate foreachyear, givinga2.8% of increase forthe number
of shipsonthe global fleetunder500GT, a 1% of increase forthose between500GT and 25 000GT and a
2.6% increase forthe global fleet.
Figure 13 : Number of ships according to EMSA Equasis in the world fleet
Accordingto the valuesof the reportsof Lloyd’sRegister,DNV andOceanShippingConsultants we have the
numberof newbuild-shipsfrom2020 to 2025. These numbersare detailed infigure 13.
Figure 14 : Number of LNG ships fuelled in World Fleet by 2025

25. 25
To draw thisgraph,we did some assumptionsforthe DNV andOceanShippingConsultantsvalues.The DNV
curve is ratheroptimistic,we extrapolatedthe 1000 LNG shipsfor2020 to 4000 LNG shipsfor2025. For the
reportof OceanShippingConsultants,we choose alinearprogressionupuntil 1250 shipsfor2025, the value
givenintheirstudy. The lastline of the table assume that90% of the LNG fleetwillbe shipsinthe 500GT –
25 000GT range. It represents4.2% of the worldfleetforthe highcase scenarioof LR, 1.4% for the base
scenarioandalmost0% for the lowcase scenario.
For the shipscallinginLeixões,the dataupuntil 2013 were collected.We didthenanextrapolationsimilar
to the one we didfor the global fleet(referstofigure 12).
Consideringthe base case scenarioof LRon the numberof shipscomingto Leixoesin2025, it meansthat 36
shipsrunningonLNG will come tothe portby 2025 and 4 of themwill bunker.Assumingthese4shipsare
containershipsof 15000 GT, theywill need3240 cubicmetersof LNG, meaning 1522.8 tons/yearof LNG
needed. Withthe highcase scenario,itrepresentsanapproximate of 4010 tons/yearof LNG neededin
Leixões.
Leixõesisone of the tree mainportsin Portugal,withSinesandLisbon.The repartitionof the callsforthis3
ports are almostidentical forLisbonandLeixoesandabitlessforSines(considering COSTA ActionLNG-The
Portuguese ViewforPortsandShipping report).The needforLNGforPortugal isreaching 11 000 tons/year
by 2025. This estimationremainslowincomparisontothe optimisticvaluesgivenbythe CostaActionLNG
report.
Figure 15 : Prediction on ships calling to Leixões until 2025

26. 26
4. Conclusion
The latestregulationsbythe International Maritime Organizationandthe characteristicsof liquefiednatural
gas encourage the change fromcrude oil to LNG for shipping.Itwouldpermittoreduce the environmental
impactof shippinginthe ECA zonesina firsttime andthenglobally. The limitof thisprojectisthe costto
adapt the technologyof the shipsandthe engines.
Our studyfocusedon forecastingdemandof LNGas marine fuel inthe Portuguese Coast.Forthis,we paid
special attentiontothe portof Leixões andthenextrapolatedtothe whole coast.We usedthe age
distribution,size andtype of the ships,numberof shipsgoingtothe port,powerandlengthetc. Thisleads
to a relativelylow demandof LNGfornewbuildsshipsrunningandbunkeringLNGinthe Portuguese ports.
Comparingtoother studiesleadbyDNV,Lloyd’sRegisterorOceanShippingConsultants, the needforLNG
ina shortfuture,meaning2025 or 2030, withthe resultsgiveninourreportare pessimistic,underthe low
case scenarioof these agencies.The problempreventingthe change forLNGis the lackof installationsand
the mistrustof investorstodesignnewbuildshipsrunningonLNG regardingthe networkof LNG.
Furthermore,aslongas the cost of LNG ishard to forecastandthe marketdifficulttoread,stakeholderswill
slowthe pace to implementLNGasa marine fuel.
Personal thoughts about this internship
The maritime transportationandthe reductionof the emissionswasreallyagoodtopicand challenge to
forecast.Knowingveryfewaboutthissubject,the firstmonthpermittedme tolearna lotaboutthiswith
the documentationread.Withaninteresttoworkfor the naval constructionorocean protectionwiththe
association“SurfriderFoundation”,thistopicstimulatedmyinterest.
Nevertheless,the documentaryresearchcanbe reallywide andannoyingatsome point.Workingwithout
the interactionof a groupprojectis less stimulatingandthe meetingswithmyprofessorconfirmedthis
view.Be partof a team fora projectreallymattersandthe discussionwithcolleaguespermittospeedyour
workand followaline.

27. 27
5. References
BoletimEstatisticoanual APDL(AdministraçãodosPortosdoDouro e Leixões,SA)
International TrendsforSmall Scale LNG,Lloyd’sregistermarine
LNG-fuelleddeepseashipping,Lloyd’sregistermarine
Bunkeringof shipsthatuse liquefiednatural gasor dual fuel atKlaipedaState Seaport
LNG for Shipping–Currentstatus DNV
LNG bunkeringdemandandbunkeringinfrastructure –DNV
Lloyd’sRegister(2012),“Global Marine Fuel Trends2030”
COSTA ActionLNG -The Portuguese ViewforPortsandShipping
NorthEuropeanLNG Infrastructure Project – DanishMaritime Authority
LNG – A cost efficientsolution ?DNV –GL
ExpecteddemandforLNGas shipfuel inNorthernEurope – GgermanisherLloyd
Shipping2020 – DNV GL