Singapore awards LNG bunkering licenses

JANUARY 27, 2016 — The Maritime and Port Authority of Singapore has awarded licenses for liquefied natural gas (LNG) bunkering of ships to Pavilion Gas and a joint bid between Keppel Offshore & Marine (Keppel O&M) and BG Group.

The proposals were the two that best met criteria in a request for proposal, which closed on Sept 30 last year, and the MPA will now work with the two license holders to develop the necessary infrastructure to begin supplying LNG bunker to vessels in the Port of Singapore by early 2017.

Pavilion Gas is a wholly-owned subsidiary of Pavilion Energy. Pavilion Gas manages downstream natural gas operations for both piped natural gas (PNG) and liquefied natural gas (LNG) in Singapore. The company is also responsible for the marketing, trading and distributing of natural gas in Singapore and the region.

With the granting of the license, Keppel O&M and BG Group say they will work on forming a 50-50 joint venture to deliver an end-to-end bunkering solution using LNG sourced from BG Group’s diversified LNG portfolio and leveraging Keppel O&M’s expertise in LNG vessel servicing.

Mr. Steve Hill, Executive Vice President, Global Energy Marketing and Shipping, BG Group, said, “Singapore is one of the world’s most important strategic ports and we are excited about the prospect of supplying LNG as a fuel for ships in this key market, with first delivery expected in 2017. LNG produces considerably lower emissions than conventional marine fuel and can significantly reduce a vessel’s environmental impact. We look forward to working with Keppel O&M on the safe and reliable supply of this cleaner fuel source and the ongoing development of Singapore as a leading hub for LNG in Asia.”

The new venture builds on BG Group’s existing role as the exclusive aggregator for Singapore’s first 3 million tonnes per annum of LNG demand. Following the start of commercial operations at Singapore LNG Corporation’s LNG terminal in May 2013, BG Group has to date delivered 72 cargoes into Singapore from its global LNG portfolio.

Mr. Chow Yew Yuen, Chief Executive Officer, Keppel O&M, said, “The move into LNG bunkering is in line with Keppel’s strategy to provide solutions for the global LNG market, and we are happy to partner BG Group in this exciting new venture. As the exclusive gas aggregator for Singapore, BG Group has the experience of importing LNG into Singapore where they already have a ready supply on Jurong Island.

“Together with Keppel’s years of experience and expertise in servicing vessels including gas carriers, we will be able to provide strong support to MPA in its goal to develop Singapore into a key LNG bunkering hub in Asia. As the shipping industry’s demand for green solutions continues to rise, we will also be able to help meet the needs for sustainable shipping with our growing LNG solutions, such as tug designs with dual-fuel diesel LNG engines and the retrofitting of vessel engines to run on LNG.”

Keppel O&M’s experience in providing LNG solutions includes repair services for gas carriers and complex offshore conversions. Keppel O&M successfully completed the world’s first Floating Storage and Regasification Unit (FSRU) in 2008, which was followed by two more similar units, and was the first shipyard to undertake the conversion of a Floating Liquefaction Facility in 2014.

To focus further efforts on solutions for the LNG market, Keppel O&M set up a new design and technology arm, Gas Technology Development (GTD) in 2015. Through its other design and technology arm, Marine Technology Development, Keppel O&M has also developed a range of designs for LNG vessels including barges, carriers, and dual-fuel tugs that can run on diesel and LNG.