Market Trends of UK LNG Bunkering Industry
Ferries and OSV Segment to Dominate the Market
- In the next five years, the LNG-based ferries and OSVs are projected to increase, considering the large number of LNG-fueled ferries and OSVs on order. It is likely to increase the demand for LNG bunkering services in the forecast period.
- The United Kingdom's government's plan to increase the country's global oil and gas production share is expected to boost the market. The United Kingdom Continental Shelf (UKCS) region is expected to become one of the most active offshore regions for maritime transport.
- Indigenous oil and gas production contributed around USD 28.4 billion to the United Kingdom's GDP in 2022. The UK government forecasts that two-thirds of the country's energy mix is expected to come from oil and gas by 2035.
- Additionally, various anticipated oil & gas decommissioning projects scheduled during the forecast period will likely increase the demand for OSVs, which is expected to drive the market.
- Since a major portion of the trade occurs through ships, and with the ship operators operating the LNG-fueled engines, the demand for LNG bunkering fuels is expected to increase in the country during the forecast period.
Understand The Key Trends Shaping This Market
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Growth in Oil & Gas Activities to Drive the Market
- To implement a sustainable and environmentally friendly transport network, the government of the United Kingdom, along with various oil and gas and shipping operators, promoted the use of LNG-powered marine transport. It will likely drive the LNG bunkering market in the oil & gas industry.
- The key factors driving the LNG bunkering market in the oil & gas industry are the increase in LNG demand to reduce carbon footprint in the shipping industry and the demand for natural gas in the country. Furthermore, LNG is a better alternative fuel, and the government is taking initiatives for LNG adaptation.
- The natural gas production in 2021 was about 32.7 billion cubic meters, providing around 16% production share to the region. Natural gas production is expected to rise in the coming years owing to the country's reduced price.
- According to Baker Hughes, the offshore rig count was 13 in March 2023, higher than the offshore rig count of March 2022. Thus indicating the dominancy of offshore oil and gas activities in the country over onshore.
- It calls for demand for ships in oil and gas E&P-related activities, likely to boost the target market over the forecast period.
