Gazpromneft to begin LNG bunkering in 2021

Russia's state-controlled Gazpromneft will start LNG bunkering next year, the firm's subsidiary Gazpromneft Marine Bunker (GPNMB) said.

The firm — which sold 3mn t of marine fuels in 2019 — expects traditional marine fuels that are not compliant with Marpol-2020 restrictions on sulphur content to fall to 15-20pc of the market from around 70pc before 1 January this year, with low-sulphur oil alternative and LNG making up an increasing share of the marine fuel supply mix. This transition has meant that GPNMB will stop production of fuel oil at its refineries by 2024.

GPNMB in June last year agreed to provide LNG for bunkering to vessels operated by Russian shipowners Rosmorport and Sovcomflot, announcing plans to build the country's first LNG bunkering vessel. The firm is set to handle bunkering for Sovcomflot's LNG-fuelled Aframax crude tankers, with the fuel provided through ship-to-ship transfers from an LNG bunkering barge than GPNMB plans to build. The shipowner is set to have 11 LNG-fuelled Aframax tankers.

Fellow state-controlled firm Rosneft expects Baltic LNG bunkering demand to reach 840,000 t/yr in 2020-23, the firm said last year. The firm has also ordered 12 LNG-fuelled Aframax tankers from the Rosneft-led Zvezda yard in Russia's far east. The first — the Vladimir Monamakh — is slated for delivery this year, having completed construction in May.

But demand growth in the region for small-scale LNG — for bunkering or off-grid uses — appears to have stumbled this year, with Russian independent Novatek postponing a final investment decision (FID) on the planned second 1.2mn t/yr train at its 660,000 t/yr Vysotsk liquefaction facility in the Gulf of Finland. The FID was slated for the end of 2019, but Novatek is reviewing small-scale LNG demand in northern Europe, before committing to triple Vysotsk's capacity. Exports from the project have remained below the first train's capacity in recent months.

And fellow state-controlled Gazprom has yet to bring its planned 1.5mn t/yr Portovaya liquefaction project on line, despite having initially been scheduled to start up last year. The firm now expects the project to begin production this year.

By Samuel Good