Kanfer teams up with CB Fenton to create LNG bunkering hub in Panama
CB Fenton, part of Ultramar (Chile), and Norwegian small-scale LNG sea transport and bunkering vessels developer Kanfer Shipping have signed a Memorandum of Understanding with the aim of establishing a hub for LNG bunkering and small-scale LNG distribution in/out of Panama.
The duo is now seeking a partner in the LNG trading space. As disclosed, the purpose would be that the parties define a joint venture (JV) structure where the JV will be chartering ship(s) from Kanfer, buying LNG, and trading it to the maritime industry as well as gas to power clients in the region.
Panama is a strategic location for bunkering being among the most important waterways on earth. Every year there are more than 13,000 ships passing through the locks of the Panama Canal and a significant number of those ships have waiting time before entering the locks.
About 80% of the conventional bunkering is done on the Pacific side (Balboa). For this reason, the parties have agreed to perform a feasibility study for a floating storage unit (FSU) of LNG on the Pacific side.
This FSU will then be a source for smaller ships to supply the growing fleet of dual-fueled ships with LNG, but also distribute the energy to power-intensive industries, power stations, etc., in Central America and West Coast South America.
“We are delighted to partner with Kanfer for such an innovative service. More than 90% of the world trade is moved across the oceans and we believe that it requires cleaner fuel options. An LNG bunkering and distribution hub in Panama is in line with our sustainability strategy and will add value to the trade lanes using the Panama Canal. Our purpose is to contribute to the quality of life in our region of influence, through facilitating foreign trade,” says CB Fenton’s CEO, Marco A. Guerra.
As of today, the only LNG bunkering ships available in the broader region are on US East Coast and US Gulf. Finding alternatives to bunkering in the USA will be important for the industry, the two companies said, adding that before the ships enter the Panama Canal locks, it would be more efficient for them to carry out LNG bunkering on the Pacific side.
There is an increasing number of dual-fuel ships on order standing at 857 orders confirmed. These ships will require LNG bunkering stations and bunkering vessels at strategic locations around the world.
Furthermore, seeing the increasing demand for more environmentally friendly vessels, the duo believes today’s price gap between conventional fuels and LNG will vanish.
“SEA-LNG is pleased to see the continued development of new LNG bunkering infrastructure in strategic maritime locations. In addition to the previously announced bunkering services in Egypt/ Mediterranean, the Suez Canal and the Red Sea, Kanfer Shipping is now teaming up with partners to offer much-needed LNG bunkering services in Panama.
“This will bolster LNG bunkering capabilities in the region to support the rise in newbuild orders for LNG Fueled ships and continue to lay the foundation for the network of bunkering locations to support the future transition to bio-LNG and e-LNG. Waiting is not an option and Kanfer Shipping is playing a critical role in the adoption of LNG as marine fuel,” says Adi Aggarwal, General Manager Sea-LNG.
Facilitating LNG bunkering to the ships passing or calling Panama could also have a favorable impact on another important source of income for Panama, namely the tourist and cruise industry.
“We cannot do anything about the LNG prices, but together we can reduce the infrastructure cost considerably. We are confident that Panama will be an important LNG bunkering hub and even though LNG is said to be a transition fuel, we will see more of bio-LNG and synthetic LNG in years to come. We should even start researching for bio-LNG in Panama,” says Managing Partner in Kanfer, Stig Hagen.
“CB Fenton and Kanfer are now seeking partners to make the business proposition even more appealing to the industry. We believe the right partners shall have experience with bunker trading and/or commodity trading and know how about LNG or natural gas. We will actively be seeking a such partner and structure the project for having LNG bunkering and distribution services available in 2025/26.”
The company said that the two vessels ordered by Kanfer last year could fit the project in Panama as they have a unique design for both sea transportation and floating storage at a time.