Infrastructure company DNG Energy plans to start offering LNG-bunkering services for deepsea vessels out of Algoa Bay in South Africa from the second quarter of 2020 as part of a $300m project.
DNG founder and chief executive Aldworth Mbalati told TradeWinds the company has secured LNG volumes from a major US gas utility, without naming the supplier.
These will be shipped to South Africa and stored on a 147,000-cbm LNG carrier, which will serve as a floating storage unit in Algoa Bay.
Deal agreed
Mbalati said DNG and a partner have committed to buying a vessel to serve as the floating storage unit (FSU) from one of two energy majors who have offered ships in for the project.
In addition, DNG and a partner are buying a 10,000-cbm small-scale LNG carrier, which was formerly controlled by a Norwegian owner and is now being sold by a bank, to act as an LNG bunker vessel (LNGBV).
Mbalati did not name the ship, but it is thought to be one of the multigas carriers from the now collapsed IM Skaugen fleet.
LNG would be supplied as bunkers either directly via ship-to-ship transfer from the FSU or from the LNGBV.
Barge ordered
DNG has also ordered a barge from Southern African Shipyards, which is due to be completed next year.
Mbalati said the barge, which will be the largest LNG-filling platform in the world, will be able to accommodate 400 ISO containers with a total of 16,000 cbm of LNG and load directly from the FSU.
The containers can then be shipped ashore for transport by road or rail to supply land-based customers, some of whom are in remote locations.
Mbalati said DNG has secured two customers for its marine supply, one of which is Brazilian and the other European. He said the terminal is underpinned by land-based customer support.
DNG has also secured a bunkering licence for Algoa Bay.
Mbalati said start-up is scheduled for the second quarter of 2020.
"It's a fact," he added. "It will happen."
Mbalati said DNG wants to become "a good advocate for LNG as a marine fuel".
"It is all about the vision that we have, about having a much cleaner environment," he said. "It is not all about getting the largest market share. It is about moving the world into a cleaner fuel."
Scaling up
Mbalati said the LNG-bunkering facility could be scaled up in time, depending on demand with the addition of a second FSU. He added that studies have shown 4 million tonnes per annum of LNG could be supplied out of Algoa Bay.
“The initiative will improve access to LNG bunkers for commercial vessels on one of the world’s most travelled trading routes, which sees 56,000 vessels transit the region every year,” the company said.
Mbalati said LNG will also help bolster South Africa’s position as a global bunkering hub.
He highlighted the abundance of LNG supply on the African continent and the fact that LNG would be potentially less polluting than oil in consideration of South Africa’s environmentally sensitive coastline, while also improving local air quality.
