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MPA has spent S$26m to date to promote LNG as marine fuel

The Business Times by TAN HWEE HWEE


AHEAD of the implementation of a green shipping regulation, the Maritime and Port Authority of Singapore (MPA) has dished out S$26 million to kick-start the use of liquefied natural gas (LNG) as a cleaner burning marine fuel.

MPA deputy director for port services Alan Lim disclosed the up-to-date investment made by the maritime regulator at the second LNG bunkering roundtable held in Singapore on Monday.

This investment has gone towards stimulating demand for LNG in Singapore's maritime sector and establishing the first infrastructure to supply LNG as marine fuel.

Some S$18 million in all or up to S$2 million per ship has gone to co-fund the building of LNG-powered ships, with the first unit having entered operations a few months ago.

Another S$6 million went to two licensed suppliers, Pavilion Gas and FueLNG, a joint venture between Shell Eastern and Keppel Offshore & Marine, for the construction of LNG bunker vessels to perform ship-to-ship transfer of the marine fuel.

MPA has spent a further S$2 million to build up LNG trucking capabilities at SLNG Terminal to perform truck-to-ship bunker operations.

Singapore has embraced LNG as a new marine fuel ahead of an upcoming green shipping regulation that is due to take effect from Jan 1, 2020.

The International Maritime Organization (IMO) as the overarching regulatory body for international shipping, will enforce a 0.5 per cent cap on sulphur content in marine fuel by 2020. The intent is to cut emissions of harmful sulphur dioxide.

The burning of LNG emits almost zero sulphur dioxide, which puts the fossil fuel among the possible options for shipowners seeking to comply with the 2020 global sulphur cap.

Beyond the oil-based alternatives already in use, panelists at Monday's roundtable described LNG as the most feasible marine fuel because it is "safe, proven and available".

Still, its use as a marine fuel will fall short of meeting one further emission target. Last April, IMO member nations agreed to halve carbon emissions from international shipping by 2050.

Industry estimates show using LNG to replace the present marine fuels will reduce carbon emission by 20 to 25 per cent, half the quantum sought after by the IMO.

Panelists suggested that LNG can still serve its purpose as a bridging fuel for the green shipping movement for several decades more. Maritime players banking on LNG as a marine fuel have to invest in carbon sequestration in order to meet the 2050 IMO carbon emission target.