Temasek-backed Pavilion Energy is set to secure its first customer for liquefied natural gas (LNG) bunkering as the group gears up to become a key player in the industry.
It inked a memorandum of understanding (MOU) with French oil and gas supermajor Total yesterday to cooperate on bunkering.
Under the deal signed in Tokyo, Pavilion Energy's wholly owned unit Pavilion Gas will supply LNG as a ship fuel to Total Marine Fuels Global Solutions, the French giant's affiliate in charge of global bunkering activities.
The two parties may also explore further cooperation in logistics for LNG bunkering activity.
Pavilion Gas was awarded one of two LNG bunker supplier licences by the Maritime and Port Authority of Singapore in January last year, as part of efforts to make LNG an alternative marine fuel option. The other licence was awarded to a joint venture between Keppel Offshore & Marine and BG Group, which is now part of Shell.
The global maritime industry is preparing to meet tighter regulations after the International Maritime Organisation said it will implement a 0.5 per cent global sulphur cap on marine fuels in 2020, far less than today's 3.5 per cent limit. The move will likely see LNG play a more significant role in the energy mix for the sector.
Pavilion Gas was also appointed as one of the new LNG importers for Singapore by the Energy Market Authority last October.
Total chairman and chief executive Patrick Pouyanne said: "Developing a competitive worldwide LNG bunkering network will be key for the industry; securing access in the main hubs, such as Singapore, is part of our strategy.
"The MOU... is a real opportunity for Total to make further inroads in this promising new market."
Mr Seah Moon Ming, chief executive of Pavilion Energy and Pavilion Gas, said: "The supply of LNG by Pavilion Gas as a bunker fuel... supports Singapore's position as a leading bunkering port, and contributes towards establishing a global LNG bunkering ecosystem."
He added that the group's collaboration with industry partners will help build a robust LNG bunkering hub in Singapore and the region.