ship.energy

The state of play – Singapore

Shipping’s decarbonisation is in reality bunkering’s decarbonisation.  As the world’s number one bunker port, Singapore has a vital role to play in the process. Successive Singaporean governments, NGOs and other bodies have supported a number of initiatives to move the nation and the industry along the path to zero-carbon.  

There is a complex network of State institutions and NGOs involved in this process.  These include:

Singapore Ministry for Transport and Health. Senior Minister of State: Chee Hong Tat (former Principal Private Secretary to the late Lee Kuan Yew). Minister for Transport: Mr Ong Ye Kung (former Director of Group Strategy at Keppel Corporation)

Singapore’s Ministry of Sustainability and the Environment. Minister: Ms Grace Fu

Singapore Maritime Institute. Chair: Mr Wong Weng Sun

Singapore Maritime and Port Authority (MPA).  CEO: Ms Quah Ley Hoon. Chief Technology Officer and Senior Director, Innovation, Technology and Talent Development: Mr Kenneth Lim

Singapore Maritime Foundation (SMF). Chair: Andreas Sohmen-Pao. Executive Director: Mr Sanjay C Kuttan

International Advisory Panel on Maritime Decarbonisation (IAP) . Co Chair: Andreas Sohmen-Pao and Wong Weng Sun

Enterprise Singapore (ES).  CEO: Mr Png Cheong Boon

Several corporations are also key to Singapore’s role as a leading low-carbon bunker port. These include:

Singapore LNG Corporation Pte Ltd, which runs the Singapore LNG Terminal on Jurong Island

Pavilion Energy: Licensed LNG bunker supplier, a subsidiary of Temasek

FuelLNG: Licensed LNG bunker supplier, a joint venture company owned by Keppel Offshore & Marine and Shell Eastern Petroleum (Pte) Ltd

PSA Marine: Corporatised ex-Port of Singapore Authority. Operates over 60 harbour tugs including several LNG powered vessels.  Based in Singapore but with operations across Asia.

Singapore launched the Maritime Singapore Green Initiative via the MPA back in 2011, tasked with reducing the industry’s environmental impact. In 2019, the Initiative was extended to 2024 with USD 100 million of investment a year over those five years, spread over four projects: the Green Ship Programme, the Green Port Programme, the Green Energy and Technology Programme, and the Green Awareness Programme. The projects provide incentives to companies that adopt environmentally-friendly practice.

The Green Ship Programme reduces fees for Singapore flagged vessels adopting energy efficiency practice that exceeds IMO regulations, and for ships using LNG or other low-carbon fuels.

The Green Port Programme reduces port fees for ocean going vessels that exceed the IMO’s Energy Efficiency Design Index or use LNG fuel withing Singapore port limits. Further incentives are offered to use LNG powered harbour vessels while in Singapore port limits such as the LNG powered harbour tugs operated by PSA Marine.

The Green Energy and Technology Programme funds technology and pilot studies for projects which aim to reduce maritime emissions.

The Green Awareness Programme promotes environmental best practice in shipping and encourages shipping companies to adopt carbon accounting and reporting.  

The MPA’s biggest success to date is perhaps the introduction of LNG bunkering. A Pilot Study ran for three years from 2017 to test operational practices and gain experience in the process of storage and delivery of LNG marine fuel.

Several corporations are key to this development. Singapore LNG Corporation Pte Ltd, owned by Temasek, runs Singapore LNG Terminal on Jurong Island.  This is the hub from which LNG is to be delivered as marine fuels.

Several LNG bunkering licenses have been awarded to date, to Pavilion Energy Pte Ltd, FuelLNG, and Sinanju Tankers Holdings.

Pavilion established its LNG trading desk in March 2014. That May, Pavilion and BW Group established a joint venture to acquire, manage and charter LNG vessels. This was followed by deals the same year under which Total and BP supply Pavilion with LNG.  A bunker supply license was awarded in January 2016. In June 2018, Pavilion and Total agreed to develop an LNG bunker supply chain in Singapore including a joint long-term charter of an LNG bunker vessel.  That November Pavilion agreed the long-term charter of two LNG MEGI newbuildings with BW Group.

In February 2019, Pavilion agreed the charter of a newbuilding LNG bunker tanker from Mitsui OSK of Japan. The 12,300 cubic metre GTT Mark 3 Flex membrane LNG bunker tanker will be jointly managed by Mitsui OSK and Sinanju, a Singaporean bunker tanker operator which was acquired by the oil trader Vitol in April 2020. The MPA provided a S$ three million grant towards the cost of the ship, currently under construction at Sembcorp Marine’s Singapore shipyards with operations slated to commence in the first quarter of 2021. 

Pavilion announced the first commercial ship-to-ship LNG bunkering operation on 30th April 2019.  2,000 cubic metres of LNG were pumped onto a small (un-named) LNG tanker at the Singapore LNG Terminal and then transferred to an un-named heavy-lift cargo ship.

Pavilion Energy Pte Ltd agreed a five year lease on 18,000 cubic metres of segregated LNG storage and reload at the Singapore LNG terminal in March 2020. The segregated storage allows faster turnaround of operations to support LNG bunkering.

FuelLNG is a joint venture between Keppel Offshore & Marine and Shell Eastern Petroleum. It began operations. Like Pavilion, it was awarded its LNG bunker supplier license by the MPA in 2016. It has already performed over 200 truck-to-ship LNG bunkering operations.  In 2018, FueLNG ordered a 7,500 cubic metre vessel from Keppel Singmarine shipyard, in Nantong in China. The MPA contributed S$ 2.5 million to the cost of the ship. The USD 37.5 million vessel was launched in May 2020. The ship’s naming ceremony took place on 1st October 2020. The FuelLNG Bellina is named after a species of orchid. The orchid also happens to be referred to in the Chinese characters for Pavilion Energy – 蘭亭能源 ‘Lan Ting Neng Yuan’.   Ship management will be provided by K Line of Japan.

Sinanju Marine Services Pte Ltd is a long-established bunker supplier in Singapore.  In August 2019, Sinanju entered a two year time charter with Exxon Mobil Asia Pacific for the newbuilding bunker Tanker Marine Vicky. The vessel is LNG powered, giving it a 10 per cent discount on harbour fees, but it delivers traditional oil based fuels as well as LNG. It was launched at Keppel Offshore & Marine’s shipyard in Nantong, China, in September 2019 and began operations in June 2020. In April 2020, the oil trading firm Vitol acquired the full equity in Sinanju, with the firm being renamed Vitol Bunkers (S) Pte Ltd.

On 10 September 2020, the renamed Vitol Marine Vicky took delivery of 34 cubic metres of LNG from two trucks operated by Pavilion Energy. The transfer marked the start of regular truck-to-ship deliveries from Pavilion’s vehicles to the bunker tanker.

While Singapore’s efforts have been focused on LNG bunkering, the city state is also thinking long-term to national decarbonisation and to its role in shipping’s decarbonisation. Some recent developments include:

In March 2020 a Singapore/Japan consortium agreed to research and develop technology for the import, storage and use of hydrogen as a marine fuel.

In April 2020, the government launched its Long-Term Low-Emissions Development Strategy, encompassing a number of national low-carbon and sustainable programmes. These include a planned Maritime Singapore Decarbonisation Blueprint 2050 to set goals for a zero-carbon maritime industry in the nation, the establishment of the International Advisory Panel co-chaired by Andreas Sohmen Pao of BW Group and Mr Wong Weng Sun of the Singapore Maritime Institute.

In June this year, storage company Vopak and Itochu Corporation of Japan established another consortium to write a feasibility study to develop the infrastructure to offer ammonia bunkering in Singapore at Vopak’s Banyan Terminal. Both companies already participate in a consortium to develop ammonia bunkering, sponsored by Japan’s Ministry for Land, Infrastructure, Transport and Tourism.

Minister Grace Fu told Singapore’s parliament on 11 Sep 2020 that sustainability projects in the Lion City would create 4,000 ‘new and updgraded’ jobs in the coming year and 40,000 jobs over the coming decade.

Minister Ong Ye Kung addressed to the IMO’s online seminar “Future of Shipping: Decarbonisation” held on 17 September. He told the 500 participants from 63 countries about Singaporean initiatives like Tuas Port, the world’s largest automated port which dispenses with conventional diesel-operated container transporters to handle twice the number of 20-foot equivalent units with half the carbon emissions intensity compared to 2005.

On the same date, Singapore and the IMO jointly launched the NextGEN concept, an online platform to share information on decarbonisation initiatives across stakeholders world-wide. The idea is to connect IMO member states, academics and industry specialists to identify opportunities and gaps in the decarbonisation process, as well as to create networks and platforms for co-operation in exploiting these gaps and opportunities. Further discussion on implementing NextGEN will take place at the Future of Shipping Conference, scheduled for February 2021 in Singapore. Dedicated NextGEN workshops will create a ‘map’ of decarbonisation projects which can be shared with IMO member states.

Om 23rd September, the MPA and SMI launched a joint call for proposals to electrify the dozens of harbour craft working in the Port of Singapore.  A USD 9 Mn contribution from the Maritime Green Future Fund will co-fund commercially-ready fully electric harbourcraft and charging infrastructure, favouring business models that offer scalability

Via Enterprise Singapore and Innovation Norway, the Asian and Scandinavian nation agreed on 29 September to collaborate on innovation in maritime as well as other sectors, including business roundtables, study visits, trade missions and networking activities.

Singapore has a track record of innovation and state sponsorship for real-world investments in physical assets, promoting employment and economic growth through their adoption. The government clearly sees maritime decarbonisation as an opportunity as much as a challenge. We can expect to see much more from the Lion City on shipping’s journey to zero carbon.

Mark Williams

Mark Williams