BHP pens LNG supply agreement for LNG-fuelled iron ore carriers

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Image credit: www.bhp.com

BHP has signed its first LNG supply agreement for five LNG-fuelled Newcastlemax bulk carriers, which will begin transporting iron ore between Western Australia and China from 2022.

BHP Chief Commercial Officer, Vandita Pant, said Shell Energy has been awarded the contract to fuel the vessels – which BHP will charter from Eastern Pacific Shipping (EPS) for five-year terms – following a tender process that included potential suppliers across several geographies.

“The LNG bunkering contract marks a significant step in how BHP is working with our suppliers to reduce emissions across the maritime supply chain,” Ms Pant said.

“LNG fuelled vessels are forecast to help BHP reduce CO2-e emissions by 30 per cent 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 per cent emissions intensity reduction of BHP-chartered shipping of our products.”

“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 per cent of forecasted Asian LNG bunker demand in FY2023.”

Steve Hill, Executive Vice President, Shell Energy, congratulated BHP on reducing emissions in their maritime supply chain with the world’s first LNG-fuelled Newcastlemax bulk carriers.

“Decarbonisation of the shipping industry must begin today and LNG is the cleanest fuel currently available in meaningful volumes,” he continued.

“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.”

BHP said the LNG bunkering – the process of fuelling ships with LNG – will take place through the first LNG bunker vessel in Singapore, “FueLNG Bellina”, which is capable of bunkering fuel at a rate of 100-1,000 cubic metres per hour.

Image credit: www.bhp.com