Developing LNG-Related Business

Developing LNG-Related Business

LNG is a cleaner alternative to heavy oil, the vessel fuel that has traditionally powered most vessels. Recognizing the potential benefits of LNG, the NYK Group is currently expanding its business scope to feature offerings for transporting LNG, operating LNG-fueled vessels, and supplying and marketing LNG fuel. On numerous fronts, we are constantly working to help build a stronger presence for LNG.

Society's Needs and Expectations

Tapping into Growing Needs for LNG as Environmental Regulations Grow Tighter

A comparison of heavy oil and LNG fuel

Recent years have seen environmental issues-from climate change and global warming to air pollution-become pressing social concerns on a global scale, leading nations around the world to tighten their various environment-related laws and regulations. In the shipping industry, as well, restrictions on vessels' emissions of SOx (sulfur oxide), NOx (nitrogen oxide), and CO2 (carbon dioxide) are becoming increasingly strict. SOx emission regulations on fuel oil are growing particularly stringent. In January 2015, the sulfur limit for fuels usable in the North Sea, Baltic Sea, and North America Emission Control Area was lowered from 1.0% to 0.1%. Starting in January 2020, ships operating in other sea areas will need to comply with a new sulfur limit of 0.5%.

The growing demand for cleaner fuel sources has made LNG-an environmentally friendly fuel that generates no SOx emissions whatsoever-a promising solution. LNG-fueled vessels, which originally made their debut in Norway, are now expanding their reach: not only are their operating areas extending into Europe and the U.S., but more and more vessels in zones with environmental controls are switching to LNG fuel. The spread of LNG fuel hinges on the establishment and development of a solid supply infrastructure. Thus, projects aiming to lay infrastructural foundations for LNG hubs are now underway at ports in Singapore, Yokohama, and other major shipping hubs across the globe.

LNG-fueled vessel operations by region (including vessels on order)

Source: Created by NYK referencing aggregate data from Japan Marine Science Inc. (Data current as of February 28, 2017)

  • * "Vessels" include ferries, PSVs, commercial vessels (tankers, containerships, and bulk carriers, etc.), and dredgers.
    PSV = Platform supply vessel, a vessel for transporting equipment and fuel to offshore rigs, etc.
    Dredger = A vessel capable of gathering up ocean-floor sediments, etc. to secure sufficient water depths for ports (including rivers and shipping routes)

The NYK Group's Approach

Translating Extensive LNG Transport Expertise into New Ventures: Supplying and Marketing LNG-Fueled Vessels/LNG Fuel

The NYK Group has continued to expand its LNG transport network since launching routes between Japan and Indonesia in 1983. For more than 30 years now, we have given safe operations top priority and leveraged our expertise in vessel management, operation management, vessel design technologies, and financial arrangements to build strong relationships of trust with customers. LNG transport demands sophisticated technical know-how. Taking advantage of our extensive expertise in LNG vessel operations, we have successfully completed work on LNG-fueled tugboats, LNG-fueled car carriers, and LNG bunkering vessels. We also play active roles in collaborative LNG sales initiatives, working with domestic and international partners. Looking ahead, the market is likely to start seeing users requiring large amounts of LNG fuel for cross-ocean routes. The Group, aware of that potential, thus serves on a government-led feasibility study to explore the development of LNG supply bases, including onshore infrastructure and fuel supplies from offshore locations. As we bolster and expand our sales of vessel fuel, we will continue to give LNG fuel a stronger market presence through a diverse range of activities.