Japan's NYK Line is plotting LNG tanker orders and more LNG-fuelled bulkers as it eyes new fuelling business in the west of the country.

The shipowner said it had signed a cooperation agreement with Itochu Enex, Kyushu Electric Power Co and Saibu Gas Co to commercialise the use of the gas as a marine fuel for vessels.

"The parties have decided to examine the commercialisation of an LNG bunkering business in the Setouchi and Kyushu areas of western Japan," the company said.

This will include planning the construction, ownership and operation of LNG vessels required for ship-to-ship supply.

And NYK will also look to market new LNG-fuelled bulkers.

The shipowner is known to have a 95,000-dwt, LNG-capable coal carrier being built at Oshima Shipbuilding in Japan for delivery in April 2023.

This will be used exclusively by Kyushu Electric to carry coal to the power producer’s coal-fired power plants in Japan.

More innovative bulkers coming?

The announcement hints that other vessels, described as world firsts, will also be delivered in that year, for charter to other companies.

NYK said LNG is expected to be a bridging solution until next-generation zero-emission fuels such as hydrogen and ammonia are available.

The shipowner claimed that, compared to heavy fuel oil, the use of LNG can reduce emissions of sulphur oxides and particulate matter by 100%.

Nitrogen oxides can be cut by as much as 80% and carbon dioxide by 30%.

In July, NYK issued two tranches of unsecured bonds in the Japanese domestic market, each of ¥10bn ($90m).

The Tokyo-listed owner said the money will be used to fund offshore wind support and LNG bunker vessels, as well as ships using hydrogen fuel cells or that are fuelled by ammonia, LNG and LPG.

The bonds also fund efficiency improvements and optimisation of vessel operations.

NYK's joint venture United European Car Carriers (UECC) has orders for hybrid pure car and truck carriers (PCTCs) with both batteries and LNG fuelling.

The first two 3,600-ceu PCTCs were ordered in early 2019 at Jiangnan Shipyard in China, with an optional third vessel declared later that year.