- Australian resource company BHP signed the first LNG supply deal for its Newcastlemax bulkers with Shell.
- Shell has been awarded the contract to fuel the vessels, which BHP will charter from Eastern Pacific Shipping (EPS) for five-year terms.
- The five vessels will transport iron ore between Western Australia and China from 2022.
- The contract is the result of a tender process that included potential suppliers across several geographies.
Mining giant BHP has awarded Shell a landmark contract to supply fuel for the world’s first fleet of liquefied natural gas-powered Newcastlemax bulk carriers as it seeks to lower shipping emissions, reads a BHP news release.
First LNG supply deal
The contract is BHP’s first such LNG supply agreement. Its pivot towards LNG is part of a plan to lower carbon emissions and meet IMO regulations on a 0.5pc sulphur limit in marine fuels that took effect on 1 January this year.
The firm expects its LNG supply contract “to form up to 10pc of forecasted Asian LNG bunker demand in [fiscal year] 2023,” BHP chief commercial officer Vandita Pant said, without providing further details.
The supply agreement with Shell comes three months after BHP awarded a five-year term charter contract to Eastern Pacific Shipping for five LNG-powered Newcastlemax bulk carriers to transport iron ore from WA to China.
IMO 2030 goals
BHP sees the deal contributing towards its “2030 goal to support 40pc emissions intensity reduction of BHP-chartered shipping of our products,” Pant said. The firm also expects a reduction in carbon emissions by 30pc for each LNG-fuelled voyage between WA and China compared with a voyage fuelled by conventional fuels.
- The 7,500m³ FueLNG Bellina LNG bunkering vessel will provide LNG in Singapore to the BHP vessels and will be able to bunker fuel at a rate of 100-1,000m³/hr.
- The vessel is operated by licensed Singapore LNG bunker supplier FueLNG, which is a joint venture between Shell and Singapore’s Keppel Offshore and Marine.
- It was launched at sea in June and is expected to arrive in Singapore from the Keppel Nantong shipyard in China by the end of the year.
FueLNG’s first contracts will be to provide ship-to-ship LNG bunkering services to Shell-chartered tankers and one of Germany-based shipping firm Hapag-Lloyd’s container vessels.
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Source: BHP
