Keppel and BG Group Jointly win Licence to Supply LNG as Ship Fuel in Singapore

First delivery of LNG bunker expected to commence in 2017

Keppel Offshore & Marine Ltd (Keppel O&M), through its wholly-owned subsidiary KS Investments Pte Ltd (KSI), and BG Group have been selected to supply Liquefied Natural Gas (LNG) bunker to vessels in the Port of Singapore. The joint bid submitted by Keppel O&M and BG Group for the LNG bunker supplier license is one of the two top bids selected by the Maritime and Port Authority of Singapore (MPA). The awarding of the license aligns with the Port of Singapore’s plans to launch the LNG Bunkering Pilot Programme in 2017.

Bunkering is the process of supplying fuels to ships for their own use, and Singapore is the largest and most important bunkering port in the world. With the granting of the license, Keppel O&M and BG Group will form 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.

Steve Hill, Executive Vice President, Global Energy Marketing and Shipping at BG Group, expressed excitement about the partnership. "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," Hill said. "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, helping the country diversify its energy sources and increase security of supply.

Keppel O&M’s CEO, Chow Yew Yuen, emphasized the strategic alignment of this move with Keppel’s long-term goals. "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," Chow said. "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."

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

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

More details about the joint venture between Keppel O&M and BG Group to provide LNG bunkering services in Singapore will be announced upon its establishment.

Keppel Offshore & Marine Ltd (Keppel O&M), a wholly-owned subsidiary of Keppel Corporation Limited, is a global leader in offshore rig design, construction, and repair, as well as specialized shipbuilding. Its strategy is bolstered by a global network of 20 yards and offices in the Asia Pacific, Gulf of Mexico, Brazil, the Caspian Sea, Middle East, and North Sea regions. Keppel O&M aims to be the provider of choice and partner for solutions for the offshore and marine industry.

This article was originally published on Marine & Industrial Report newspaper Vol 38  No.2  Issue last April 30,2016.