Shell Plc said it delivered a record 1.1 million tons of marine liquefied natural gas to power vessels in 2024, as the world’s largest LNG player sees expanding use of the fuel that has become crucial to the energy transition.
Global consumption of LNG is expected to surge by about 60% into 2040, according to Shell’s LNG outlook. The number of LNG-powered vessels is expected to nearly double in the next five years to more than 2,000 in 2029, Shell said.
“LNG helps ship owners to reduce greenhouse gas emissions and comply with environmental regulations in a more cost-effective way today,” Tom Summers, senior vice president for Shell LNG Marketing and Trading, told Bloomberg in an email. “This is why demand for LNG-fueled vessels is picking up pace, with an increasing proportion of global operators and owners opting for LNG as their lower-carbon fuel alternative.”
While the European Union has introduced rules that target ships’ emissions, the global marine fuel market is still dominated by oil. LNG only accounted for about 6% of consumption in 2023, according to figures from the International Maritime Organization, the industry’s regulator.
While it emits less carbon than oil-derived ship propellant, LNG is still a fossil fuel and has been criticized for releasing emissions of super-potent methane, including by the billionaire Andrew Forrest, executive chairman of Fortescue Ltd, which plans to use green ammonia to de-carbonize its mining and shipping fleet.
“You think you don’t leak methane, but when your fuel is 96% methane, you’re gonna leak it,” the mining tycoon said on March 9, referring to LNG supporters. “And you have leaked it, because methane content in the atmosphere has doubled and doubled and doubled over the decades.”
Among orders for vessels able to run on alternatives to oil, recent data show LNG is out-pacing other options such as methanol.
Methane is the second-largest contributor to global warming, after carbon dioxide. Shell aims to keep the methane intensity of its operated assets below 0.2% this year and achieve near-zero methane emissions by the end of the decade.
