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Keppel grows LNG business

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LNG Industry,

Keppel Offshore & Marine has released a statement claiming that it has signed a memorandum of understanding (MoU) with Shell to jointly explore opportunities in using LNG as fuel. In the statement, the company also announced that it has secured contracts to construct its first two dual-fuel diesel LNG tugs.


Dual-fuel tugs


Keppel Singmarine Pte Ltd – a wholly owned subsidiary of Keppel O&M – secured the contracts for the tugs from Keppel Smit Towage Pte Ltd and Maju Maritime Pte Ltd, who have each ordered one vessel. Both tugs will be built to Keppel’s proprietary design. Under its LNG Bunkering Pilot Programme (LBPP) grant, the Maritime and Port Authority of Singapore is co-funding up to S$2 million for each tug. It is expected that the vessels will be completed in 2018.

The CEO of Keppel O&M, Chow Yew Yuen, said: “We are happy to secure orders to build our first two dual-fuel tugs which will be built to Keppel's award-winning proprietary designs. Keppel has a strong in-house research & development (R&D) unit that has developed innovative designs including LNG carriers and barges to meet the maritime industry's needs as the demand for green solutions and LNG rises. Combining this R&D capability with our rich shipyard expertise, we will continue to seize opportunities along the LNG value chain and help owners deliver LNG efficiently to end markets.

“We are also happy that our joint venture, FueLNG, has secured its first two contracts from Shell to provide bunkering services for Keppel Smit and Maju's dual-fuel tugs. Together, Keppel's shipbuilding/design capabilities and LNG bunkering services provide end-to-end solutions for vessel owners turning to LNG as a marine fuel in Singapore."

FueLNG is a newly created 50-50 joint venture (JV) incorporated by Shell and Keppel. It is one of only two companies that have secured a license to provide LNG bunkering services in Singapore. FueLNG will provide LNG bunkering services for Keppel Smit and Maju’s dual-fuel tugs, while Shell will supply the LNG over a 10-year period under separate contracts with the towage companies.


MoU with Shell


In order to step up its efforts in the LNG-related business, Keppel O&M – through its subsidiary, Gas Technology Development Pte Ltd – has also signed an MoU with Shell’s subsidiary, Shell Eastern Petroleum (Pte) Ltd. Under the MoU, both parties will jointly explore potential opportunities to meet LNG demand in coastal areas, inland waterways and the international marine sectors. Keppel will utilise its experience in shipbuilding and design, whilst Shell will use its experience as a global energy supplier to work with possible customers to develop both technical and commercial solutions for their LNG fuel requirements.

The Managing Director (Marine & Technology) of Keppel O&M, Michael Chia, said: “Apart from relying on our in-house R&D, we are collaborating with leading players in the energy sector that have capabilities complimentary to Keppel's to develop comprehensive and innovative solutions in LNG. Through this cooperation framework, Keppel and Shell can combine our resources and expertise as a leading global shipbuilder and energy supplier, and work together in collaboration with stakeholders such as shipping companies, terminal operators, local governments and regulators to meet their needs which may include engine retrofit or setting up coastal LNG storage infrastructure."

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