Shell Secures BHP LNG Supply Deal

BHP revealed Tuesday that it has awarded Shell an LNG supply deal for five LNG fueled Newcastlemax bulk carriers.

Under the agreement, Shell will fuel the vessels, which BHP will charter from Eastern Pacific Shipping (EPS) for five-year terms. The vessels will transport iron ore between Western Australia and China from 2022.

The deal is said to be the result of a tender process that included potential suppliers across several geographies. Technical capability, available infrastructure and cost competitiveness were among the stringent criteria, BHP outlined. LNG bunkering, the process of fueling ships with LNG, will take place through the first LNG bunker vessel in Singapore, ‘FueLNG Bellina’. The vessel is operated by FueLNG, a joint venture between Shell Eastern Petroleum and Keppel Offshore & Marine.

“The LNG bunkering contract marks a significant step in how BHP is working with our suppliers to reduce emissions across the maritime supply chain,” BHP Chief Commercial Officer Vandita Pant said in a company statement.

“LNG fueled vessels are forecast to help BHP reduce CO2-e emissions by 30 percent on a per voyage basis compared to a conventional fueled voyage between Western Australia and China, and contribute to our 2030 goal to support 40 percent emissions intensity reduction of BHP chartered shipping of our products,” Pant added.

Steve Hill, the executive vice president of Shell Energy, said, “I would like to congratulate BHP on reducing emissions in their maritime supply chain with the world’s first LNG-fueled Newcastlemax bulk carriers”.

“Decarbonization of the shipping industry must begin today and LNG is the cleanest fuel currently available in meaningful volumes,” he added.

“This LNG bunkering contract strengthens the bunkering market in the region and we look forward to working with BHP and other customers in the maritime sector on their journey to a net-zero emissions future,” Hill went on to say.

BHP is a world-leading resources company, its website states. The Melbourne, Australia, headquartered company extracts and processes minerals, oil and gas, and employs more than 80,000 people and contractors, primarily in Australia and the Americas, according to its website.

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