Alternative Fuels and Carbon Markets Update - 4th Issue

LNG for bunkering is available, but with logistical constraints. The physical supply of LNG is generally not a limitation; however, berth access and terminal schedules are tightly controlled and prioritized for industrial or power generation needs. Bunker suppliers must carefully align loading and delivery schedules to avoid costly boil-off losses and optimize barge utilization.
LNG supplies are typically lifted in larger volumes to minimize operational risk and reduce cost per unit, given the high fixed costs associated with each terminal loading . As such, bunkering tends to occur in pre-agreed windows with a strong preference for firm scheduling and compatibility vetting ahead of time.

LNG supplied in Singapore and Malaysia is largely imported from Australia, Qatar, and the United States. There is also limited pipeline gas supply from Indonesia and Malaysia, though this is primarily used for shore-based infrastructure, not bunkering.
In Singapore, LNG supply to bunker barges is handled via ship-to-ship transfers, direct terminal loading, or loading from floating storage (in Malaysia). While the original terminals were built to service national power and industrial demand—not bunkering—the supply chain has adapted in recent years with the use of offshore FSUs and ship-based transfers to support the maritime sector.

LNG bunker pricing in the region is generally indexed to JKM (Japan-Korea Marker) with a premium in USD per MMBtu, reflecting logistics, infrastructure, and handling costs. Pricing across Singapore and Malaysia is relatively consistent due to competitive tension between the ports and suppliers.
Unlike conventional marine fuels, LNG prices across Asia and Europe are broadly aligned, driven by global gas market balances rather than regional arbitrage. As such, there is little price-based "bunker shopping" between regions, and cost differentiation mainly arises from supplier-specific logistics and credit terms.
The LNG bunker market remains somewhat rigid in pricing structure, due to limited competition and infrastructure access. However, as more suppliers enter the market and as the chartering of LNG-fueled vessels becomes more common among smaller players, spot market activity is expected to grow, potentially introducing more pricing flexibility in the future.

Operationally, LNG bunkering in Singapore and Malaysia follows strict procedures involving compatibility checks, tank cooldown planning, and prior approval from port authorities (e.g., MPA in Singapore). While no unique procedures exist beyond global LNG best practices, the need for coordination is high due to the relative novelty of LNG as a marine fuel in these ports.
Suppliers must be notified in advance, and both the supplying and receiving vessels must be vetted for compatibility. Failures to follow procedure—such as tank cooldown mismanagement—can lead to delays, demurrage charges, or safety issues.
Bunker barges can operate on a milk-run basis, supplying multiple vessels from a single loading, provided the logistics and cooldowns are properly managed. However, LNG retention losses (boil-off gas) are a commercial concern, which further pressures suppliers to maintain firm supply schedules.

Access to the LNG bunkering market remains restricted. Infrastructure constraints, high entry costs, and limited berth availability make it difficult for new players to enter. Furthermore, existing suppliers like Shell (via FuelLNG) and Petco have established significant control over the market, with some preferring to deal directly with major vessel operators rather than through brokers or traders.
Despite this, new players are entering. Singapore is seeing the arrival of new suppliers such as Singfar, Equatorial, and Vitol. However, these entrants must also bring their own bunker barges and LNG supply arrangements to gain MPA approval—highlighting the bundled nature of market access: infrastructure, supply, and vessel all need to align.  

Singapore and Malaysia remain at the forefront of LNG bunkering in Asia, but infrastructure bottlenecks and market consolidation have constrained rapid growth. While demand is rising, especially among container lines and dual-fuel vessels, supply-side limitations—particularly berth availability and LNG carrier scheduling—continue to cap expansion.
As regulatory and environmental pressures mount, LNG will remain a key part of the marine fuel mix in the years ahead. However, clients seeking to use LNG should plan well in advance, ensure technical readiness, and be aware of the structured nature of supply windows and pricing mechanics in this market.