Keppel Grows LNG Business

Maritime Activity Reports, Inc.

October 5, 2016

Keppel Offshore & Marine (Keppel O&M) announced it has secured contracts to build its first two dual-fuel diesel liquefied natural gas (LNG) harbor tugs, and signed a Memorandum of Understanding (MOU) with Keppel-Royal Dutch Shell plc (Shell) to jointly explore opportunities in using LNG as fuel.

 
Keppel O&M's wholly owned subsidiary Keppel Singmarine Pte Ltd secured the tug contracts from Keppel Smit Towage Pte. Ltd and Maju Maritime Pte. Ltd. who have ordered one unit each. The two tugs are expected to use bunkering services provided by the joint venture company, FueLNG Ltd.
 
The tugs will be built to Keppel's proprietary design which won the Outstanding Maritime R&D and Technology Award at the 2015 Singapore International Maritime Awards. The Maritime and Port Authority of Singapore is co-funding up to S$2 million for each tug under its LNG Bunkering Pilot Programme (LBPP) Grant. The tugs are expected to be completed in 2018.
 
Chow Yew Yuen, Chief Executive Officer of Keppel O&M, said, “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 new 50-50 joint venture company incorporated by Keppel and Shell which secured a license as one of only two companies to provide LNG bunkering services in Singapore. For Keppel Smit and Maju's dual-fuel tugs, FueLNG will be providing LNG bunkering services while Shell will be supplying the LNG fuel over a period of 10 years under separate contracts with the towage companies.
 
To bolster its efforts in the LNG-related business, Keppel O&M, through its subsidiary Gas Technology Development Pte. Ltd., signed an MOU with Shell's subsidiary, Shell Eastern Petroleum (Pte) Ltd, to jointly explore potential opportunities to cater to the demand of LNG as a fuel in coastal areas, inland waterways and the international marine sectors.
 
The partnership will leverage Keppel's strength in ship building and design, and Shell's experience as a global leading energy supplier to work with potential customers to develop technical and commercial solutions for their LNG fuel needs.
 
Michael Chia, Managing Director (Marine & Technology) of Keppel O&M, added, “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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