LNG-Powered Shipping a Vital Link in SE Asia Power Generation Supply Chain Project

| Singapore

Small scale LNG delivery using LNG-powered vessels part of the JIP development scenario.

A Joint Industry Project (JIP) initiated by Det Norske Veritas AS (DNV) during Singapore Maritime Week in 2010, has determined that Liquefied Natural Gas (LNG)-powered shipping is a vital part of the future LNG supply chains in South East Asia. The study forecasts that container feeders might be the first ship segment to adopt LNG for propulsion regionally. About 20% of the regional container feeders are up for renewal by 2020. Local and regional ferries are also well suited to use LNG for propulsion in the longer term.

The study identified multiple island regions in South East Asia outside any pipeline grid (e.g. Eastern Indonesia, Southern Philippines) where total demand for electrical power exceeds 500 MW, proposing the demand could be met LNG-powered generation. The distribution of LNG to these power plants would require multpile small scale LNG carriers. As the price of crude oil is rising faster than the price of natural gas, the financial incentives for using LNG for power generation and shipping fuel are equally increasing with considerable environmental benefits to be gained from such a fuel switch.

With stricter requirements for environmental performance, and an increasingly competitive expected price for LNG as fuel for ships, a shift to LNG propulsion may have an exciting impact on Singapore as a bunkering hub.

DNV reported in 2009 that there were 13 small (below 13000 GWT) LNG carriers in operation worldwide, distributing LNG on a small scale.

Mr Lam Yi Young, Chief Executive of the Maritime and Port Authority of Singapore (MPA), said “With the push towards cleaner fuel for ships, the results of this Joint Industry Project are timely in evaluating the potential for LNG bunkering services in Singapore. LNG’s lower carbon dioxide emissions, minimal sulphur and nitrogen content as well as the abundant availability, allows it to be a viable alternative fuel source for ships, which is also in line with MPA’s commitment to promoting environmentally-friendly shipping.”

“The consortium is eager to use the findings from the LNG study to build business for the participants and to inform regional stakeholders about the opportunities that lie ahead,” says Mr Markussen, “DNV as a company has already decided to invest into a next phase of the JIP. We are now inviting old and new members to join the consortium and one or more of the many project streams that will be kicked off in April and May.”

The consortium is made up of 16 participants from all parts of the LNG value chain. Among the members are Gazprom, Rolls-Royce, Wartsila, Hanjin Shipping, I.M. Skaugen, Keppel, The Linde Group, Trans LNG, DNV, BW group, BBG, the Maritime and Port Authority of Singapore, the two Singapore universities, NUS and NTU.

This article compiled using information from a DNV press release.

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