Evgenia Vanadzina Gasum

Evgenia Vanadzina

Portfolio Manager
evgenia.vanadzina@gasum.com
tel. +358401801066

02.03.2021  

Maritime market update: Shell forecasts LNG bunker demand to triple by 2023

A further drop in Risavika LNG front month to 25.80 EUR/MWh, a 2.9 % reduction as of Friday last week. European gas prices adjusted lower due to seasonal change and expectations of warmer than usual start of March. Gas storage levels in Europe are currently around 37% full compared to 60% full at the same time last year, based on the latest Gas Infrastructure Europe data. Storages will need to be topped up significantly in the coming months, providing support to gas prices.

Oil prices continued gaining as benchmark oil prices were at high levels and most of the products showed inventories draw on week ending 26th of February. Most significant gain was for fuel oil 3.5 which has increased 4 % and closed at 359.35 USD/t for front month contracts on a back of inventory draw. Low sulfur oil (MFO 0.5) has gained 2.3 % and closed at 469.4 USD/t, and marine gasoil (MGO 0.1) has increased by 1.8 % week on week and closed at 521.16 USD/t.

Despite the unprecedented volatility, global demand for LNG increased to 360 million tons in 2020. Though marginal, the growth reflected the resilience and flexibility of LNG. LNG bunker demand is expected to grow from just above 1 million tons in 2020 to 3.5 million tons in 2023, according to recently published Shell’s LNG Outlook 2021. This growth is based on the addition of more than 200 LNG fueled ships to the current fleet and they would be supplied by 45 bunker vessels planned to be in operation by 2023.

 

Front Month Price index

LNG Risavika*

LBG blend

Risavika**

FO 3.5 FOB Rdam

MFO 0.5 FOB Rdam

MGO 0.1 FOB ARA

ULSD FOB ARA

Unit

25.80

28.80

25.76

32.23

35.78

38.08

EUR/MWh

437.07

487.89

359.25

469.40

521.16

531.18

USD/t

Price index 2.3.2021.png

 

LNG Risavika - LNG FOB Risavika 

LBG Risavika 10 % - 10 % blend of Liquified Biogas

FO 3.5 FOB Rdam – European 3.5% Fuel Oil Barges FOB Rdam (Platts) Futures Quotes

MFO 0.5 FOB Rdam - European FOB Rdam Marine Fuel 0.5% Barges (Platts) Futures Quotes

MGO 0.1 FOB ARA - Gasoil 0.1% Barges FOB ARA (Platts) Futures Quotes

ULSD FOB ARA - European Diesel 10 ppm Barges FOB ARA (Platts) Futures Quotes

 

Source: CME Group, Gasum, Reuters, Shell

*An estimate for LNG FOB Risavika 

** An estimate for 10 % LBG blend FOB Risavika