LNG bunker demand prediction : an instrument for marine fuel strategy in Australia

Maritime transportation has been the most favourable and efficient means of carrying goods over vast distances. According to recent figures, more than 90% of goods transported worldwide are made through shipping. With the growth to economies and population the industry is in a continuous growth. The dark side of it is the harmful emissions from ships, mainly due to the innate low grade chemical compositions in conventional marine fuel. Continued growth of ships’ emissions and their accumulative negative effects on the environments are a grave concern for all stakeholders in the maritime industry. As a result, governments and other regulatory authorities are taking stringent measures to reduce emissions from ships. Amongst the various emission reduction approaches taken by the industry to comply these regulations, the use of LNG as a marine fuel is becoming the popular choice.
Whilst countries such as Norway and the key members of the Europa Union are actively promoting the adoption of LNG for fuelling ships in Emission Control Areas, lack of bunkering infrastructure and supporting initiatives are still a hindrance for its global uptake. Australia’s numerous LNG projects, when they reach their intended capacity, are projected to make it the leading natural gas exporter in near future. However, vessels trading in Australian waters continue to consume low quality fuel oils in their entirety, while on the ecological front, sensitive ecosystems in Australia are under siege due to detrimental effects of climate change. Endorsing LNG as a marine fuel in Australia would therefore bring great financial and environmental benefits to the nation. Lack of such initiatives manifests the absence of reliable research and a coherent policy which could motivate the industry towards use of LNG as a marine fuel in Australia.
This study aimed to explore the potential of LNG as a marine fuel in short-sea shipping and international commercial shipping. The preliminary stages of the research comprised of an in-depth literature review with reference to the evolution of LNG as a marine fuel globally, as well as in an Australian perspective. The findings revealed the absence of a robust motivation to formulate a coherent strategy in Australia for adoption of LNG as a marine fuel. It is expected that such an inspiration could be provided by a reliable LNG demand prediction. A methodology has also been constructed in this study for prediction of LNG demand in Australia.
The accuracy of the model heavily depends on the estimation of fuel consumption in ships. The current estimation methods are based on top-to-down and bottom-up approaches. A case study was conducted with in-situ data to assess the accuracy of the two approaches. Results of the case study has shown that current methods estimate more than 57% high fuel consumption compared to actual values and thus, it is important to use in-situ data to improve the accuracy of ship fuel consumption and LNG bunker demand prediction.