Bid & Tender
Qatargas, UASC, Shell Sign MoU to Use LNG as Marine Fuel

Date : Apr 22, 2016

Qatargas, United Arab Shipping Company (UASC) and Shell have signed a memorandum of understanding (MoU) to explore the development of liquefied natural gas (LNG) as a marine fuel in the Middle East region, said a report.


This is the second such agreement signed by Qatargas and Shell in recent months and establishes another core partnership within the shipping industry.


The MoU was signed by Qatargas chief executive Khalid bin Khalifa al-Thani, UASC chief executive Jorn Hinge and Qatar Shell Companies managing director and chairman Michiel Kool, said the report.


The partners will work to develop and supply LNG as marine fuel for the merchant fleet before the end of the current decade.


Through this agreement, the partners will explore the development of new markets for LNG to be used as propulsion fuel within the Middle East and the conversion of UASC’s existing vessels providing the opportunity to use a cleaner fuel.


The MoU envisages LNG supplies to be made available from Qatargas 4, a joint venture between Qatar Petroleum and Shell Gas, with the UASC line potentially using the fuel for its recently-built container ships.


Qatargas chairman Saad Sherida al-Kaabi said that LNG as a marine fuel is gaining momentum in the deep sea transportation industry as the best alternative to meeting increasing environmental standards.


Hinge said that UASC has seen increased demand on green shipping from customers in recent years.


He added that stricter environmental regulations are also expected, something we are well prepared for. Many organisations have already included stricter requirements in their tenders and evaluation criteria, meaning only those carriers with optimum environmental credentials will qualify or be shortlisted.


UASC has received 13 of 17 new vessels over the past 16 months; seven 15,000 TEU (twenty foot equivalent unit) vessels and six 18,800 TEU ultra-large container vessels. It is due to take delivery of a further four 15,000 TEU vessels in the coming months.


Hinge noted that these ships are the greenest in the world and uniquely LNG-ready, implying once the infrastructure is ready globally, with a quick and cost-efficient retrofit, they can run on LNG and become even more eco-friendly, added the report.