Bunker supplier Peninsula and Scale Gas — a subsidiary of Spanish energy company Enagas — have signed a contract to build and jointly own an LNG bunkering vessel (LNGBV) that will serve the Strait of Gibraltar.
The 12,500-cbm ship will be built at Hyundai Mipo Dockyard in South Korea. After its delivery in June 2023, it will be chartered exclusively to Peninsula for an initial seven-year period.
Peninsula plans to use the vessel to supply LNG marine fuel to vessels at the Port of Algeciras and in the Strait of Gibraltar.
LNG will be loaded at Enagas regasification plants, predominantly in Huelva in south-western Spain.
Enagas chief executive Marcelino Oreja said the newbuilding agreement is "in line with Enagas' commitment to promoting the development of a value chain that allows more efficient and sustainable maritime transport, and reinforces the commitment of the company to achieve carbon neutrality by 2040".
The LNGBV project is co-financed by the European Union's transport aid programme, Connecting Europe Facility (CEF).
The CEF has contributed €11m ($13.3m) towards developing the vessel, through a consortium of Enagas, Scale Gas and the Algeciras Port Authority.
Spain's Puertos del Estado, which manages state-owned ports including Algeciras and Huelva, aims to support the development of a market for LNG marine fuel in order to improve air quality in ports and in close coastal areas.
Enagas subsidiary Scale Gas has a strategic plan to develop small and medium-scale LNG infrastructure in Spain.
Scale Gas chief executive Oscar Macineiras said the LNGBV agreement is "the culmination of a three-year project" that will consolidate that strategy.
Transition to alternative fuels
This is the first LNGBV newbuilding contract signed by Peninsula, which dropped 'Petroleum' from its name when it rebranded earlier this year.
The bunker company has been taking steps to move away from its traditional business and towards what it has called a more "sustainable" future that will comprise new fuels such as LNG and related services.
John A Bassadone, owner and chief executive of Peninsula, called the LNGBV project "the first step of our transition to a more sustainable future" as one of the world's biggest marine fuel suppliers.
"This project is one of many initiatives around Peninsula's strategic pillars: customer centricity, sustainability and technology," he said.
"This vessel will hopefully be the first of many that will offer flexibility and solutions across our global network to our customers."
Peninsula completed its first LNG bunker supply at the end of January, when it loaded the liquefied gas for customer H-Line Shipping in Malaysian waters, in partnership with Petronas Marine.
The company has two 9,000-dwt bunker tankers under construction at Dayang Offshore Equipment in China, which will hit the water in 2021 and 2022 respectively.
Its live fleet comprises 13 vessels, the majority of which are bunker tankers plus two LR1 product tankers that were bought in the secondhand market over the past two years.
