Keppel wins dual-fuel tugs order, pens LNG MoU with Shell

Keppel Offshore & Marine on Monday said it has secured contracts to build its first LNG-fuelled tugs, and signed a memorandum of understanding with Shell to jointly explore opportunities in using LNG as fuel.

The first two dual-fuel LNG harbour tugs the company was contracted to build have been ordered at Keppel’s unit Keppel Singmarine by Keppel Smit Towage and Maju Maritime who have ordered one vessel each.

Keppel Smit Towage is a joint venture between Keppel Shipyard and Smit Singapore, a unit of Royal Boskalis Westminster.

Keppel added in its statement that the Maritime and Port Authority of Singapore is co-funding up to S$2 million (approximately US$1.46 million) for each tug under its LNG bunkering pilot programme grant.

The tugs that will run entirely on LNG are expected to be completed in 2018, Keppel said.

The two tugs are expected to use bunkering services provided by the Keppel-Royal Dutch Shell joint venture company, FueLNG. It is a new 50-50 joint venture company by Keppel and Shell which secured a license as one of only two companies to provide LNG bunkering services in Singapore.

FueLNG will be providing LNG bunkering services for Keppel Smit and Maju’s dual-fuel tugs, while Shell will be supplying the LNG fuel over a period of 10 years under separate contracts with the towage companies.

Keppel, Shell MoU

Keppel O&M, through its unit, gas Technology Development, signed a memorandum of understanding with Shell to jointly explore potential opportunities to cater to the demand for LNG as fuel in coastal areas, inland waterways and the international marine sectors.

Michael Chia, Managing Director (Marine & Technology) of Keppel O&M noted that through the cooperation framework, Keppel and Shell can combine their resources and expertise as global shipbuilder and energy supplier, to meet the need for engine retrofitting or setting up coastal LNG storage infrastructure.

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