Singapore takes the LNG bunkering lead

The republic is pressing ahead with all sorts of initiatives to make LNG as a ship fuel more attractive

Singapore as the world’s largest bunkering hub continues to play a leading role in the development of LNG as a fuel for ships.

In October the Maritime & Port Authority (MPA) and Singapore LNG Corporation signed an MOU to develop a truck loading facility for LNG bunkering. MPA has committed S$2m to co-fund this facility.

The MPA and SPRING Singapore, an agency under the Ministry of Trade and Industry, are jointly launching a technical reference for Singapore’s LNG bunkering standards in early 2017.

To encourage the switch to LNG-fuelled vessels, MPA had earlier announced a grant of up to S$2m for each newly built LNG-fuelled vessel.

Newly registered LNG-fuelled harbour crafts in Singapore now enjoy a five-year waiver of port dues. MPA also grants a port dues concession to qualifying vessels engaging LNG-fuelled harbour craft for their port operations.

In January MPA awarded two LNG bunker supplier licences to Pavilion Gas and a joint proposal of Keppel Offshore & Marine and BG Group. The pair will start offering LNG bunkers in early 2017.

In July a 50:50 joint-venture company was formed between subsidiaries of Keppel Offshore & Marine and Royal Dutch Shell that will establish another LNG bunkering business in Singapore.

How keen world shipping is to adopt LNG as a ship fuel remains a moot point, one addressed by MPA’s chief executive Andrew Tan, who noted in a speech this July: “It is clear that the implementation of LNG as a marine fuel is not easy and will take some time.”

Tan elaborated: “The dramatic collapse in oil prices in the past year has narrowed price differentials, relative to other low sulphur solutions. The shipping community has also demonstrated less enthusiasm in putting forth investments into building of LNG-fuelled vessels with the current weak economic conditions. Nonetheless, we will need to work together to tackle the chicken and egg dilemma that stands in the way of the development of LNG as a marine fuel.”

October’s decision by IMO member states to push through a global sulphur cap could act as the spur for LNG adoption, with Singapore likely to be ahead of the curve in the range of services it can offer world shipping.

This is an abridged article of an interview that first appeared in our fourth annual Singapore Market Report – a 28-page magazine that launched last week. Readers of Splash can access the full magazine for free online by clicking here.

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