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Keppel grows LNG business

October 5, 2016

Singapore’s Keppel Offshore & Marine (Keppel O&M) has secured contracts to build its first two dual-fuel diesel LNG tugs, and signed an agreement with supermajor Shell to jointly explore opportunities in using LNG as fuel.

The two tugs, ordered by Keppel Smit Towage and Maju Maritime, are expected to use bunkering services provided by the Keppel-Shell 50-50 joint venture company, FueLNG Ltd. 

While FueLNG provides LNG bunkering, Shell will be supplying the LNG fuel over a period of 10 years under separate contracts with the towage companies.

Expected to be completed in 2018, 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 SG$2 million for each tug under its LNG Bunkering Pilot Program grant.

Furthermore,to bolster its efforts in the LNG business, Keppel O&M through its subsidiary Gas Technology Development, signed a memorandum of understanding with Shell Eastern Petroleum, a subsidiary of Shell. The duo will jointly explore potential opportunities to cater to the demand of LNG as a fuel in coastal areas, inland waterways and the international marine sectors.

Michael Chia, managing director of marine and Technology at Keppel O&M 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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