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BHP seals LNG supply contract with Shell for five newcastlemaxes

Photo: BHP WesternAustraliaIronOre_HQ.jpg
Australia’s BHP has awarded its first LNG supply agreement to Shell for five LNG-fuelled newcastlemax bulkers for transporting iron ore between Western Australia and China from 2022.

Shell will provide the LNG as fuel for the ships, which BHP will charter from Eastern Pacific Shipping (EPS) for five-year terms.

“The LNG bunkering contract marks a significant step in how BHP is working with our suppliers to reduce emissions across the maritime supply chain,” saud Vandita Pant, chief commercial officer of BHP.

“LNG fuelled vessels are forecast to help BHP reduce CO2 emissions by 30% on a per voyage basis compared to a conventional fuelled voyage between Western Australia and China, and contribute to our 2030 goal to support 40% emissions intensity reduction of BHP-chartered shipping of our products,” Pant added.

Steve Hill, executive vice president of Shell Energy, said that decarbonisation of the shipping industry must being today and LNG is considered the cleanest fuel currently available in meaningful volumes.

“This LNG bunkering contract strengthens the bunkering market in the region and we look forward to working with BHP and other customers in the maritime sector on their journey to a net-zero emissions future,” Hill said.

The first LNG bunkering will take place in Singapore through LNG bunker tanker FueLNG Bellina. The bunker tanker is operated by FueLNG, a joint venture between Shell Eastern Petroleum and Keppel Offshore & Marine.

“The LNG bunkering contract will enable BHP to manage fuel supply risk, build LNG operational capability internally, and also help to strengthen the emerging LNG bunkering market in the region. This contract is expected to form up to 10% of forecasted Asian LNG bunker demand in FY2023,” Pant said.

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