Qatargas, United Arab Shipping Company (UASC) and Shell have signed a tripartite memorandum of understanding (MoU) to explore the development of LNG (liquefied natural gas) as a marine fuel in the Middle East region.
This is the second such agreement signed by Qatargas and Shell in as many 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.
The partners will continue to work diligently 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.
“LNG as a marine fuel is gaining momentum in the deep sea transportation industry as the best alternative to meeting increasing environmental standards,” Qatargas chairman Saad Sherida al-Kaabi said, adding the agreement among Qatargas, Shell and UASC demonstrates the commitment to building LNG-fuelled vessels and the supply system to support it.
“Through this effort we know we can make a significant impact on how the shipping industry evolves over the next generation. We see this as our opportunity to support the international efforts to reduce greenhouse emissions and create a cleaner environment for future generations,” the Qatargas chief executive said.
Hinge said UASC has seen increased demand on green shipping from customers in recent years.
“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,” he added.
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.
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, according to Hinge.
“Shell has been a pioneer in this area with our investments in LNG for transport infrastructure in Europe and the US, and we look forward to now deploying our expertise to create a regional hub in the Middle East in collaboration with two very strong global partners based in the region, Qatargas and UASC,” Kool said.