Keppel to build 2 LNG tugs, explore use of the gas as fuel

Keppel Offshore & Marine has secured contracts to build its first two dual-fuel diesel LNG harbour tugs using its proprietary design (left). The tugs are expected to be completed in 2018.
Keppel Offshore & Marine has secured contracts to build its first two dual-fuel diesel LNG harbour tugs using its proprietary design (left). The tugs are expected to be completed in 2018.PHOTO: COURTESY OF KEPPEL

Keppel Offshore & Marine has secured contracts to build two LNG harbour tugs and an agreement with Shell to explore opportunities related to using the gas as fuel.

Keppel Singmarine, the wholly- owned subsidiary of Keppel Offshore and Marine (Keppel O&M), announced yesterday that it had won the dual-fuel diesel LNG tug contracts from Keppel Smit and Maju Maritime. They will be the first such vessels built by the firm.

Keppel's joint venture with Royal Dutch Shell, FueLNG, also secured contracts to provide bunkering services for the tugs. The vessels will be built to Keppel's proprietary design and are expected to be completed in 2018. The Maritime and Port Authority of Singapore (MPA) is co-funding up to $2 million for each tug.

Keppel O&M chief executive Chow Yew Yuen said in a statement yesterday that "Keppel has a strong in-house research & development 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."

The MPA is co-funding LNG- fuelled vessels to stimulate demand for LNG as a bunker fuel. It handed out pilot LNG bunkering licences earlier this year to align Singapore's port with growing international regulatory requirements and stricter standards for emissions.

The use of the cleaner burning fuel is being explored by ports and vessel owners to comply with the International Maritime Organisation's cap on sulphur emissions that will kick in by 2020.

A Keppel O&M subsidiary also signed a memorandum of understanding with a Shell unit to jointly explore opportunities to cater to the demand of LNG as a fuel in coastal areas, inland waterways and international marine sectors.

Mr Michael Chia, managing director of marine and technology at Keppel O&M, said the partnership would help them collaborate with stakeholders, such as shipping companies, terminal operators, governments and regulators, to work on projects like engine retrofit or building coastal LNG storage facilities.

A version of this article appeared in the print edition of The Straits Times on October 06, 2016, with the headline 'Keppel to build 2 LNG tugs, explore use of the gas as fuel'. Print Edition | Subscribe