What does LNG mean? What about LBG?

Gas-related abbreviations can be a bit confusing. Here’s our quick guide to Gasum gas products for maritime transport.

LNG = liquefied natural gas

LBG = liquefied biogas

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Gunnar Helmen

Sales Manager
tel. +47 475 09 048
gunnar.helmen@gasum.com

Mikael Lidén Gasum

Mikael Lidén

Sales Manager Marine
tel. +46 70 000 9447
mikael.liden@gasum.com 

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The cleanest marine fuel available

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If we are to fight climate change, emissions from the use of conventional fuels such as heavy fuel oil in maritime transport need to be reduced. Rapidly becoming more common as a cost-effective alternative, liquefied natural gas (LNG) is the cleanest marine fuel available. Compared with heavy fuel oil, LNG has significantly lower CO2 emissions, and almost nonexistent particle emissions.

LNG is a safe and proven technology that offers higher energy content and lower operational and maintenance costs. It is suitable for all vessel types, including ferries, passenger ships, tankers, bulk carriers, supply and containerships.

As a premium provider of LNG, Gasum is a trustworthy partner for both experienced buyers and for customers that are switching from conventional fuels to LNG. Our wide variety of sustainable yet efficient services and solutions support our customers in optimising their operations for a more sustainable future.

Decarbonization of the maritime industry 

Maritime traffic generates 3 percent of the world’s total greenhouse gas emissions such as carbon dioxide. This contributes to global warming and extreme weather conditions. CO2 is emitted by ships using petroleum-based fuels to power main and auxiliary engines. Through the International Maritime Organization (IMO) the world’s shipping industry is constantly working to reduce CO2 emissions. 

LNG as a marine fuel meets all the current and forthcoming IMO and EU regulations. Switching to LNG means complete removal of Sox and particles, and reduction of Nox emissions of up to 85 percent. LNG reduces CO2 emissions by at least 20 percent.

As a fuel, LNG is interchangeable with renewable LBG (liquefied biogas), as they both consist mainly of methane. This means that the two gases can be mixed. Using both LNG and LBG is one of the concrete actions that will take us towards a low-carbon society of the future.

Stay up-to-date about maritime market

We publish maritime market updates on our website every week. Updates cover topics from prices to current trends affecting maritime market. See the latest market updates below.

Maritime market updates

26.05.2020

Maritime market update: Norwegian shipowners commit to a climate neutral shipping

Risavika LNG index has dropped 6 % week on week to 14.49 EUR/MWh last week. European gas prices have fallen to the record low levels. The gas market remains oversupplied and gas storages are filling up, despite a large amount of US LNG cargoes arriving to Europe being cancelled for June and July.

Oil prices continued rising on combination of demand recovery and OPEC+ and US oil production cuts last week. Fuel oil prices (FO 3.5) front month closed at 182.25 USD/t last week, 12 % higher than previous week. Low Sulphur (MFO 0.5) front month has gained 8 % and closed at 239.86 USD/t. Fuel oil stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) dropped by 4% as of 22nd of May on rising exports from the hub, according to Global Insight data. While gasoil stocks rose 5 % as imports to the hub have increased. 

While the world is slowly recovering from the pandemic, the attention is back to long-term strategies and tackling global challenges. In case of the maritime industry that would be a realization of the 50 % carbon reduction by 2050. Some market players are already establishing their long-term visions. Norwegian shipping companies have recently committed to four ambitious goals laid out in a climate strategy. The goals state that members will cut their greenhouse gas emissions by 50% per transported unit by 2030, compared to 2008. From 2030, Norwegian Shipowners' Association members will only order vessels with zero emission technology. From 2050, the Norwegian fleet will be climate neutral. The strategy also entails an international ban from 2050 on fuel types that are not climate neutral.

Gasum offers Liquified Biogas (LBG), the sustainable maritime fuel, already now. Check Maritime LBG page for more details and follow the chart in our weekly updates for the price reference on 10% LBG/LNG blend product. 

 

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

 

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

14.49

17.49

13.07

16.47

19.22

20.61

EUR/MWh

245.38

296.21

182.25

239.86

279.90

287.44

USD/t

 Price index 25.5.2020.png

Source: CME Group, Gasum, Reuters, ICIS, Norges Rederiforbund

*An estimate for LNG FOB Risavika 

** An estimate for 10 % LBG blend FOB Risavika

 

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19.05.2020

Maritime market update: Bunker demand to fall by 5 % in 2020

Risavika LNG index continued its downward trend following European gas markets fundamentals, resulting in the index falling by 2 % week on week. Despite lower pipeline gas imports to Europe and colder weather last week, the market remained oversupplied. Most of the oversupply is accounted for LNG imports and historically high gas inventory levels.

Oil prices went up last week on OPEC+ production cuts, lower US oil production, recovering demand and easing fear of lack of oil storage capacity. Fuel oil prices (FO 3.5) front month closed at 160.68  USD/t last week, 8 % higher than previous week. Low Sulphur (MFO 0.5) front month has gained 3 % and closed at 220.40 USD/t. Stocks of all refined product held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) oil hub fell 4% as of 14th of May, indicating demand recovery, after a record high level just a week before.  

However, the pace of recovery is not going to be fast. According to IEA forecast, global bunker demand will fall by 8 % year on year in the second quarter as covid-19 related restrictions and policies still limit trade movements and passenger travels, while demand from oil and chemical tankers will stay largely unchanged. The agency forecasts that bunker demand from container, dry bulk and cruise ships will marginally recover in the third and fourth quarters.  However, it will still result in demand from all vessel types dropping by 5 % this year compared to 2019.

 

LNG Risavika - LNG FOB Risavika 

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

 

Front Month Price index

LNG Risavika*

FO 3.5 FOB Rdam

MFO 0.5 FOB Rdam

MGO 0.1 FOB ARA

ULSD FOB ARA

Unit

15.34

11.52

15.13

17.86

19.30

EUR/MWh

259.87

160.68

220.40

260.08

269.20

USD/t

 Price index 18.5.2020.png

Source: CME Group, Gasum, Reuters, Argus Media, IEA

*An estimate for LNG FOB Risavika 

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12.05.2020

Maritime market update: High fuel oil stock levels pose a challenge for IMO 2020 compliant fuels

The Risavika LNG price index is down by 1 % week on week. European gas markets continue to be influenced by high supply, both from pipeline gas and by liquefied natural gas (LNG) imports. However, this week’s prices are likely to be supported by lower temperatures across the continent and easing lockdowns across the Europe.

The oil market was rallying last week on the oil production cuts and easing lockdowns. However, the rally was limited by the sentiment of the potential second wave of coronavirus in Asia and new US-China tensions.  The fuel oil prices (FO 3.5) front month closed at 147.68  USD/t last week, 20 % higher than previous week, while Low Sulphur (MFO 0.5) has gained 12 % compared to previous week. The fuel oil stocks rose by 9 % over the past week to record levels of 1.745 m tonnes, from 1.604 m tonnes in previous week. The Amsterdam-Rotterdam-Antwerpen (ARA) fuel oil storage utilization rose to 87% of capacity.

The high stocks pose a challenge for International Maritime Organization (IMO) 2020 compliant fuels. A shelf life of 0.5 % fuel oil is only 2-3 months in most cases. According to Argus Media, Veritas Petroleum Services reported that 0.5 % fuel oils can become unstable in less than three months, and when fuels become unstable, they may be beyond the point of recovery. Safe storage time depends on the asphaltenes and paraffinic content of fuel oils as well as levels of moisture and contaminants in the fuel. Contaminants can react with fuel and cause oxidation. Therefore, a thorough fuel quality monitoring should be done in order to prevent the fuel from deteriorating.

 

LNG Risavika - LNG FOB Risavika 

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

 

Front Month Price index

LNG Risavika*

FO 3.5 FOB Rdam

MFO 0.5 FOB Rdam

MGO 0.1 FOB ARA

ULSD FOB ARA

Unit

15.70

10.59

14.64

17.12

18.45

EUR/MWh

265.97

147.68

213.30

249.32

257.32

USD/t

 Price index 11.5.2020.png

Source: CME Group, Gasum, Reuters, Argus Media

*An estimate for LNG FOB Risavika 

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