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DNV GL forecasts a high share of natural gas in maritime sector by 2050

Risavika LNG front month has dropped 5.8 % week on week to 20.50 EUR/MWh following the European gas markets. Increased gas flows from Norway and LNG sendouts weighed on front gas prices last week.

Fuel oil 3.5 has continued downside trend dropping by 7.5 % to 219.04 USD/t, while low sulfur oil products (MFO 0.5 and MGO 0.1) have dropped by 4.3-5.5 % accordingly compared to previous week following the drop of crude oil prices and inventory data, which showed a build both in the US and ARA oil products stocks.

DNV GL has released its Energy Transition Outlook: a global and regional forecast to 2050. According to the company, maritime sector emissions could decrease from current 820 Mt CO2 to 600 Mt by 2050. As direct electrification is expected to be viable only in the shortsea segment and few low- and zero-carbon fuel alternatives are available and practical today, maritime transport is considered a hard-to-abate sector from emission perspective. DNV GL forecasts a high share of natural gas, ammonia, and other low- and zero-carbon fuels in maritime market by 2050, while use of oil would reduce dramatically, reaching only 6 % of its current consumption.

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

20.50

23.50

15.70

19.01

21.56

23.24

EUR/MWh

347.20

398.02

219.04

276.95

314.01

324.17

USD/t

 Price index 14.9.2020.png

Source: CME Group, Gasum, Reuters, DNV GL

*An estimate for LNG FOB Risavika

** An estimate for 10 % LBG blend FOB Risavika