Shell inks time charters for two SCF LNG-fueled Aframaxes

FEBRUARY 20, 2018 — Shell has signed time charter agreements for two of six LNG dual fueled Aframax tankers under construction for Russia's SCF Group (Sovcomflot).

The time charter agreements were signed today by Evgeny Ambrosov, Senior Executive Vice-President of SCF Group, and Mark Quartermain, Vice-President of Crude Trading for Shell,at a ceremony held during International Petroleum Week in London.

The vessels are part of a series of six SCF Group tankers currently under construction and due for delivery between third quarter 2018 and first quarter 2019. The two tankers will be on time charter to Shell for up to 10 years, with a minimum commitment of five years.

This "Green Funnel" series of ice class 114,000 deadweight LNG-powered Aframax tankers will operate within Shell's global freight trading network.

The vessels will also use Shell's specialized LNG bunker vessels, such as the Cardissa, for fueling in North West Europe. Shell will provide further supply points across North West Europe and the Baltic as it expands its LNG fuelling infrastructure.

The signed agreements mark the next step in an ongoing LNG fueling collaboration between SCF Group and Shell and follow the LNG fuel supply agreement between Shell and Sovcomflot concluded in 2017, which pioneered the expansion of LNG fueling to the tanker industry and, more generally, to vessels not tied to fixed routes or set timetables.

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Each tanker will have an ice class 1A hull, enabling year-round export operations from the Baltic. They are being built at the Hyundai Samho shipyard in South Korea to technical specifications been developed by SCF Group's own engineering center, with the close involvement of Hyundai Heavy Industries.and Russian shipbuilders (Zvezda shipbuilding complex, Primorsk region).

They will have seven-cylinder, 62 cm bore type WinGD 7X62DF main engines built by HHI's Engine & Machinery Division (HHI-EMD) in Ulsan, South Korea (see earlier story).

The vessels' main engines, auxiliaries, and boilers will be dual fuel, capable of using LNG, and the vessels will also be fitted with Selective Catalytic Reduction (SCR) technology to comply with Tier III regulations governing NOx emissions when in gasoil fuel mode.

Commenting on the signing Evgeny Ambrosov, Senior Executive Vice-President of SCF Group, said:

"Together, SCF Group and Shell are leading the development and adoption of LNG as a fuel within the tanker industry, committed to significantly reducing the environmental footprint of energy shipping. After proper experience of operating LNG-fueled vessels, SCF Group will share its feedback on their performance with Zvezda shipbuilding complex, a Russian facility that is envisaged to commence the domestic construction of such large-capacity LNG-fueled tankers by 2021. At SCF Group we have a strong sense of pride that Shell has chosen to partner with us in creating LNG-fueled Aframax tankers."

Mark Quartermain, Vice-President, Shell Crude Trading, said:

"LNG fuel will play a fundamental role in the future energy mix. Chartering and fueling these vessels highlights Shell's commitment to LNG as emissions standards tighten. We look forward to continuing to build upon our strong relationship with SCF to support our trading operations in key areas."

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