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BHP issues world's first LNG-fuelled freight tender to ship iron ore

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Mining giant BHP has issued the first LNG-fuelled bulk carrier tender to ship up to 27 million mt of iron ore, or about 10% of its exports, with a view to curb emissions, the company said Tuesday.

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The tender was for vessels servicing the busiest bulk transport route in the world and targeting a reduction of greenhouse gas emissions on the route, according to a statement by BHP.

"Emissions resulting from transportation and distribution of BHP's products represent a material source of its value chain emissions," Rashpal Bhatti, Vice President of the Maritime and Supply Chain Excellence BHP, said.

The tender followed the conclusion of the Green Corridor joint industry project, which is an industry-driven project for transportation of iron ore and coal on the Australia-China route.

The project, which was concluded last September, involved major Australian miners like BHP, Rio Tinto and FMG, LNG supplier Woodside, as well as other shipping companies to develop a suitable LNG-fuelled bulk carrier solution for the Australia-China route.

BHP has invited selected industry leaders, from ship owners, banks and LNG fuel network providers, to bid for the tender.

Bhatti previously said that LNG could bring carbon emissions down by 25% compared to low sulfur fuel oil.

"While LNG may not be the sustainable homogenous fuel of choice for a zero carbon future, we are not prepared to wait for a 100% compliant solution if we know that, together with our partners, we can make significant progress now," Bhatti added.

LNG has been viewed as an increasingly important marine fuel to reduce sulphur emissions ahead of IMO 2020, which will see the sulfur limit in marine fuel globally dropping to 0.5% in 2020.

--Shermaine Ang,

--Edited by Kshitiz Goliya,