Japan’s Sumitomo Corp and Malaysia’s Petronas Trading have teamed up to market and supply LNG bunkers in Malaysia and Japan.
A memorandum of collaboration between the parties expands their LNG bunkering offerings outside of their home territories by marketing each other’s supplies and related services to their own customers under the Petronas Marine and Sumitomo brands.
It effectively gives Petronas Trading an opening into the Northern Asian LNG bunker markets, and Sumitomo a presence in South East Asia.
The goal of the agreement is to “build industrial platforms and end-to-end supply chains to offer more environmentally friendly and cost-efficient LNG for use as a marine fuel and reduce the greenhouse gas emissions attributable to maritime transport”, according to a joint statement from the companies.
“As a progressive energy and solutions partner, we are continuously looking to co-create a sustainable market environment with industry players. We recognise our role in delivering the next-generation fuel to cater for the bunker demand in the maritime industry, and we are pleased to be collaborating with Sumitomo and hope to collaborate with other LNG Bunker players in Japan in meeting our customers’ emerging needs,” Petronas Trading chief executive officer Shamsul Bahari Salleh said.
“With this agreement, we pursue our ambition to build a comprehensive network of LNG bunkering. It also underscores our commitment to offer our customers the best available and technologically proven solution to significantly reduce the environmental footprint of maritime transport,” he added.
TradeWinds understands the agreement came about as both companies have been keen to expand their global LNG bunkering capabilities as the industry switch to LNG as a marine fuel gains momentum.
According to recent statistics from classification society DNV GL, while less than 1% of the global fleet runs on alternative fuels such as LNG, about 10% of newbuildings have been ordered with alternative fuels systems, most of which will use LNG.
Sharing LNG infrastructure
The agreement between Sumitomo and Petronas Trading sees both companies expand their LNG bunkering reach by collaborating with a partner who has the necessary infrastructure elsewhere in the world.
Both companies said they were “committed to promoting this solution to the market by having the right infrastructures in place, ensuring availability of supply and through continuous advocacy to users”.
Sources close to Sumitomo said it wants to expand it capabilities to supply LNG bunkers outside of Japan as the take-up of dual-fuel LNG systems is growing among Japanese shipowners
Malaysia, located along the busy shipping lanes of the Malacca and Singapore straits, was described as being a logical first step as much of the vast Japanese shipping fleet passes through these waters.
LNG sources said that such collaboration agreements allow each partner to expand without the need to invest in new LNG assets and infrastructure while the global LNG-powered fleet remains small.
It also increases the utilisation rates for the assets and related infrastructure while the fleet is gradually built up.
Specialist vessels
Sumitomo, which has been involved in the bunker sector for 68 years, is a stakeholder in Ecobunker Shipping, a company that is building the Ecobunker Tokyo Bay, a 2,500-cbm LNG bunker tanker under construction at Fukuoka Shipbuilding.
The versatile bunker vessel also has tanks that will allow it to supply very low-sulphur fuel oil.
The vessel will be used for ship-to-ship transfers in Tokyo Bay by Sumtimo when it enters service later this year.
The other partners in Ecobunker Shipping are Uyeno Transtech, Yokohama-Kawasaki International Port, and the Development Bank of Japan.
Petronas Trading started supplying LNG bunkers at the Malaysian port of Pasir Gudang in November using the 7,500-cbm LNG bunker tanker Avenir Advantage (built 2020). The vessel was the first dedicated LNG bunker vessel to be based in South East Asia.
The Keppel Nantong-built ship is owned by Future Horizon (L), a joint venture between MISC Berhad and Avenir LNG, and chartered for three years by Petronas LNG.
MISC’s shipmanagement arm, Eaglestar, is the vessel’s technical manager.
Last September, Petronas Marine head of global LNG bunkering Rafe Mohamed Ramli said the number of LNG-fuelled vessels is expected to more than double to over 1,000 ships by 2030.
He said demand for LNG as a bunker fuel in Singapore and Malaysia is expected to increase, given the 80,000 ship transits through the Strait of Malacca each year.
