Keppel Singmarine wins S$50m deal to build South-east Asia's first LNG bunkering vessel

Keppel Singmarine has secured a contract worth S$50 million to build South-east Asia's first liquefied natural gas (LNG) bunkering vessel.

The subsidiary of Keppel Offshore & Marine (O&M) won the newbuilding award from FueLNG, a joint venture between Shell Eastern Petroleum and Keppel O&M.

Keppel Singmarine expects to complete construction on the dual-fuel LNG bunkering vessel in Q3 2020.

The vessel will have a capacity of 7,500 cubic metres.

This shipbuilding contract for Keppel Singmarine was announced one day after the Maritime and Port Authority of Singapore unveiled the award of co-funding grants valued at S$3 million each to FueLNG and Pavilion Gas to defray the construction costs of two LNG bunkering vessels.

FueLNG and Pavilion Gas are licensed suppliers of LNG as marine fuel.

The construction of this pair of vessels represents a significant step towards building ship-to-ship transfer capabilities needed to service ocean-going ships out of Singapore.

MPA's CEO Andrew Tan said: "We are pleased that FueLNG, Keppel and Shell are taking the lead in growing the LNG bunkering infrastructure in Singapore. As the world's largest bunkering port, it is important that we support the development of LNG bunkering in our port to cater to future demand for LNG as a marine fuel."

The vessel will be built to a proprietary design of Keppel O&M's ship design and development arm, Marine Technology Development (MTD), for greener and safer bunkering activities within the Singapore port.

As emissions standards tighten globally, the industry is seeing increasing demand for LNG-fuelled ships, with 123 LNG-fuelled ships in operation and 150 on order as at early 2018. To meet this increasing demand, oil majors like Shell are expanding their LNG bunkering capabilities to increase the availability of LNG in Singapore and across the world.

Abu Bakar, managing director (gas & specialised vessels), Keppel O&M, noted that this newbuild order from FueLNG has come on the back of other contracts for newbuild solutions the yard group has secured along the gas value chain. "Keppel O&M is able to harness its expertise in newbuilds and LNG to provide customised solutions for clients, and is in a strong position to capture opportunities as the industry adopts greener solutions."

Lauran Wetemans, director, FueLNG, and general manager, Shell Downstream LNG, added: "This vessel enables FueLNG to provide ship-to-ship bunkering services to customers for cost-effective, cleaner fuel alternatives. The customised design enables FueLNG to operate efficiently and safely within the port of Singapore and we look forward to continuing to work with industry stakeholders to enhance and provide LNG bunkering infrastructure in Singapore."