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FueLNG achieves 100th LNG bunkering operation in Singapore, ahead of IMO 2020

Singapore — FueLNG, a joint venture between Keppel Offshore & Marine and Shell Eastern Petroleum, has completed its 100th LNG bunkering operation in Singapore, setting a new milestone in the world's largest bunkering port, Keppel Corporation said Monday.

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The bunkering operations were completed with no loss-time incidents, and in accordance with the Technical reference 56 standard for LNG bunkering in Singapore, it said in a statement.

This comes as less than nine months before the International Maritime Organization's new global sulfur limit for marine fuels is implemented on January 1, 2020.

The IMO rule is set to cap the global sulfur content in marine fuels at 0.5%, from 3.5% currently. This applies outside the designated emission control areas where the limit is already 0.1%.

To comply with this rule, shipowners will have to switch to more expensive cleaner fuels, use HSFO with scrubbers or seek alternative fuels such as LNG.

Singapore, for its part, has been pushing for the use of LNG as a marine fuel to prepare the industry for 2020.

"We are optimistic that the industry will increasingly adopt LNG as a marine fuel and look forward to furthering our partnership with industry stakeholders to build a world-class LNG bunkering network in Singapore," said Chris Ong, chairman FueLNG and CEO Keppel O&M.

FueLNG has been providing truck-to-ship LNG bunkering for two dual-fuel tugs operated by Keppel Smit Towage since May 2018, Keppel Corporation said.

The benefits of LNG as fuel have been tracked by Keppel Smit Towage, which has observed that when running on LNG, the tugs perform as efficiently as when using diesel, but consume 5% less fuel in mt, it said.

FueLNG is also able to provide LNG for the commissioning of LNG systems and machinery, and trials for gas-fueled vessels, it said.

In September 2017, FueLNG completed its first operation and provided LNG for the commissioning of the floating liquefaction vessel Hilli Episeyo, it added.

In addition, FueLNG has placed an order with Keppel O&M to build Southeast Asia's first LNG bunkering vessel, which is projected to be completed in the third quarter of 2020, it said.

"The delivery of our LNG bunkering vessel in 2020 is an important step for growing a robust and reliable global LNG fuel supply chain in the years to come as we will be able to increase the availability of LNG with ship-to-ship services for our end clients," said Tahir Faruqui, director FueLNG and head Shell Global Downstream LNG.

Some industry sources have cited high initial costs, the risk of a methane slip and the availability of adequate LNG bunkering infrastructure as potential impediments to the widespread adoption of LNG as a marine fuel.

However, its uptake is gathering momentum as it helps to tackle multiple environmental issues such as SOx, NOx and greenhouse gas emissions. In addition, it is also amply available, which is positive for its accelerated use.

DNV GL's Maritime Forecast to 2050, part of the research behind the DNV GL Energy Transition Outlook 2018, projects that more than 10% of the world's shipping fleet will be powered by LNG by 2030, up from less than 0.3% in 2019.

The report estimates that LNG powered vessels will make up 23% of the world's fleet by 2050.

Meanwhile, Singapore's Keppel Marine and Deepwater Technology, a subsidiary of Keppel O&M, has also inked an agreement with global classification society DNV GL, DNV GL said last week.

The agreement covers potential newbuilding projects including LNG bunker vessels, small-scale LNG carriers and floating storage regasification units, as well as LNG related assets employing battery and hybrid technologies, in Singapore as well as globally, it said.

--Surabhi Sahu, surabhi.sahu@spglobal.com

--Edited by Wendy Wells, wendy.wells@spglobal.com