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Keppel wins deal to build Southeast Asia’s first LNG bunkering vessel

First out of the blocks after being awarded SGD3m ($2.3m) in co-funding from the Maritime and Port Authority of Singapore (MPA) earlier this week, Keppel Offshore & Marine (Keppel O&M) announced a SGD50m contract from FueLNG, its joint venture with Shell Eastern Petroleum to build Southeast Asia’s first liquefied natural gas (LNG) bunkering vessel.

Designed to work within Singapore port and scheduled for completion in the third quarter of 2020, the dual-fuel LNG bunkering vessel will have a capacity of 7,500 cubic metres (cbm) and will be built by Keppel O&M unit Keppel Singmarine, with the help of the grant through MPA’s LNG Bunkering Pilot Programme (LBPP).

The other grant awardee, Pavillion Gas has yet to make an announcement on its building programme. The expectation is that both vessels are to be delivered in time for the implementation of the global sulphur cap in 2020.

The vessel will be built to the MTD 7500U LNG design, a proprietary design of Keppel O&M’s ship design and development arm, Marine Technology Development (MTD), for greener and safer bunkering activities within Singapore port. The vessel’s twin screw azimuthing propulsion system will boost manoeuvrability enabling bunkering without tug assistance, while propulsion and power management systems will help optimise fuel consumption.

Read More: FueLNG and Pavillion Gas receive $4.5m in co-funding for Singapore LNG bunker tankers

MPA ceo Andrew Tan said: “We are pleased that FueLNG, Keppel and Shell are taking the lead in growing the LNG bunkering infrastructure in Singapore. As the world’s largest bunkering port, it is important that we support the development of LNG bunkering in our port to cater to future demand for LNG as a marine fuel.”

Abu Bakar, Keppel O&M md (Gas & Specialised Vessels) said: “We are delighted to build FueLNG’s first LNG bunkering vessel, which comes on the back of other recently secured contracts for newbuild solutions along the gas value chain. Keppel O&M is able to harness its expertise in newbuilds and LNG to provide customised solutions for clients, and is in a strong position to capture opportunities as the industry adopts greener solutions.”

FueLNG chairman and Keppel O&M ceo Chris Ong said: "This vessel, which will be the first of its kind in Southeast Asia, will enable FueLNG to be the first in Singapore to provide ship-to-ship LNG bunkering services within the Singapore port. This demonstrates our commitment to global customers as the industry increasingly adopts cleaner fuel alternatives. Tapping on Keppel's shipbuilding expertise enables us to have a highly capable vessel that meets our requirements for safety and efficiency. Supported by Shell's experience, we aim to be a key driver in promoting LNG as a marine fuel."

Lauran Wetemans, director, FueLNG, and Shell Downstream LNG gm added: “Shell’s global expertise in LNG bunkering will support this growth in Singapore. This vessel enables FueLNG to provide ship-to-ship bunkering services to customers for cost-effective, cleaner fuel alternatives. The customised design enables FueLNG to operate efficiently and safely within the port of Singapore and we look forward to continuing to work with industry stakeholders to enhance and provide LNG bunkering infrastructure in Singapore.”

Read More: Japan LNG bunkering business officially launched

Capable of running on both LNG and marine diesel oil, the LNG bunkering vessel is more efficient than conventional bunker vessels. It is able to harness boil-off gas, a byproduct of bunkering operations as well as the continuously evaporating LNG in the cryogenic tank, which would otherwise be flared off. It is also designed with a barge-like extended flat surface to maximise vessel compatibility which will enable FueLNG to deliver LNG bunkers to a wide range of vessels.

To meet increasing demand for LNG bunkering, oil majors such as Shell are expanding their global LNG bunkering capabilities and having this capability in Singapore will complement the already established LNG bunkering infrastructure in key ports around the world.

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