INTERVIEW: BW investing heavily in LNG
Singapore-based BW, which has been involved in LNG shipping for more than 40 years, has been spending heavily on its LNG business lately, with the most recent order bringing BW’s LNG fleet size to 20 tankers.
In an interview with LNG World News, BW’s Managing Director of Shipping Yngvil Ashiem discusses the company’s LNG business, construction progress on BW’s two newbuild FSRU’s, as well as the company’s plans for the future and the usage of the chilled gas as fuel for ships.
The latest order for two LNG carriers at South Korea’s DSME confirms BW as one of the world’s biggest owners of tankers that carry the chilled gas. It is known that the LNG market has substantially grown in the last couple of years.
How does BW’s LNG fleet expansion relate to global LNG supply/demand outlook, and what are the main reasons that BW is focusing on LNG?
“BW has been a major player in the transportation of gas for over 40 years. We have built competence and experience in all aspects, from design and construction, to technical and commercial management, with safety and quality as the top priorities. With the expected growth in both LNG supply and demand, BW would like to continue to support our customers to ensure safe and efficient handling of their LNG. BW has the ambition to be at the forefront to keep LNG safety record spotless, support our customers in their efforts to optimize their trading systems, deliver reliability and make sure we do it as energy-efficiently as possible – saving cost and the environment at the same time.
“To meet this ambition, BW is actively working to understand our existing and future customer requirements. At the same time, we make sure we know and utilize the best available solutions and technology, also by participating in R&D projects and developing new concepts. But most importantly, we work on developing people to make sure we continue to have world-class competence both onshore and onboard.”
BW has two floating storage and regasification units being built at South Korea’s SHI. Can you update us on the construction progress?
“BW’s first newbuild FSRU will be delivered by the end ofApril 2015, and the second in November 2016. It is an exciting step which builds on our long experience in LNG shipping, gas floating storage and FPSO development, construction and operation. We look forward to supporting our customers by providing cost and time-efficient solutions to receiving LNG.
BW’s FSRUs will each have a storage capacity of 170,000 m3, equipped with technical specifications designed to meet existing and potential customer requirements.
The construction is as scheduled. Recently, we put the accommodation block on our first FSRU and a photo of this was shown on LNG World News.”
How do you see the FSRU market, which is fairly new, and what do you expect from this market in the future?
“As an established provider of LNG shipping services and with extensive experience in floating terminal solutions, BW sees the FSRU market as the next logical step. BW is focused on its vision to be the leading brand in energy transportation, serving customers with wide-ranging marine solutions across the energy value chain.
As more countries look to LNG as an alternative fuel source, there has been growing interest in FSRUs and the advantages they present. First, FSRU projects are flexible and economical alternatives to shore-based LNG receiving terminals. FSRUs can be located near shore (for example, alongside a pier or a jetty) or offshore (permanently moored to the seabed), and this flexibility allows them to operate in different markets. Second, an FSRU allows countries quicker access to LNG supplies with a significantly shorter start-up time compared to shore-based LNG receiving infrastructure. Third, our FSRUs have been equipped to be used as a conventional LNG carrier and operated in any LNG transportation market. This is an important feature for customers with seasonal requirements, for instance.”
Earlier this year, BW entered into a joint venture with a new LNG player Pavilion Energy, owned by Temasek, to acquire, manage and charter maritime LNG assets, including LNG carriers. What are the current projects within the joint venture with Pavilion Energy – any new developments planned for it?
“Since the formation of BW Pavilion LNG in May 2014, we have been busy. As a start, the joint venture will own the 138,028m3 BW GDF Suez Everett, and will take delivery of a pair of 161,880 m3 LNG newbuildings currently under construction at HHI. New business is under development. BW is pleased to be facilitating the development of Singapore as an LNG trading centre by contributing assets and operational expertise.
Regionally, we are hoping to leverage our capabilities to deliver innovative solutions. We are excited by the many new prospects this joint venture will bring.”
LNG as fuel for ships is currently the burning topic in the world of shipping. Classification society DNV said in its Shipping 2020 publication that it sees 1000 vessels sailing on LNG by 2020. What is your opinion on using LNG as fuel for ships, and is BW considering to switch their vessels to run on this fuel?
“BW has many years of experience in using LNG as fuel on our LNG carriers and we believe LNG will be the fuel of the future in other segments also. Having a major office in Norway, BW has followed the development of LNG fueled ferries with great interest.
The technology is there, but to get the ball rolling we need the infrastructure to make LNG available in ports. It is very encouraging to see major ports such as Singapore and Rotterdam, and suppliers like Shell actively working to make this happen.
There was also an important step taken by DNV-GL some years back where they designed vessels for the future with LNG propulsion and showed that it could be done.
Last but not least, SIGGTO has taken the initiative to work on the required safety standards for LNG bunkering. BW supports the work to share experience and best practices from LNG shipping.
BW is seriously considering LNG propulsion on our next-generation vessels. With our extensive in-house experience with handling of gas, we are well positioned to move when the timing is right.”