Doha: Qatar Petroleum and Shell subsidiaries signed an agreement today to establish a company that would provide global LNG bunkering services.
The Shareholder Agreement signed by Qatar Petroleumâ€™s Wave LNG Solutions and Shell Gas & Power Developments BV paves the way for the establishment of a joint venture company owned equally by both parties, subject to customary regulatory approvals.
The new companyâ€™s principal business activities will include the procurement of LNG, setting up LNG bunkering infrastructure (storage and bunker vessels) at various strategic locations around the world, and facilitating the sale of LNG as a marine fuel to end customers around the world.
In his remarks at the signing ceremony, H E Saad Sherida Al Kaabi, Minister of State for Energy Affairs, President & CEO of Qatar Petroleum, said: â€œWe see LNG bunkering as a promising solution for the shipping industry in light of a continuously evolving regulatory environment, and as an important opportunity to enhance LNGâ€™s position as a clean energy source, particularly in maritime transportation.â€
LNG bunkering provides the shipping industry with a unique fuel that helps meet the industryâ€™s environmental and economic objectives. Â An increasing number of ship owners and operators are turning to LNG over traditional marine fuels in response to tighter sulfur and nitrogen oxide emissions regulations. In October 2016, the International Maritime Organization (IMO) announced the introduction of a global 0.5% sulfur cap from 2020.
Al Kaabi added: â€œLNG demand for bunkering is expected to grow significantly over the coming years, and we believe there is a real potential for such demand to reach 35 million tons per annum by 2035. This requires focused investments and collaboration among all industry players to provide the required solutions our customers are looking for. In addition, the right partnership model, similar to the one we are establishing today with our partner, Shell, will also be pivotal in maturing this business.â€
Ben van Beurden, Royal Dutch Shellâ€™s Chief Executive Officer, said: â€œThe shipping industry is starting to make the very necessary strides to reduce emissions from vessels. LNG is already playing an important role as the cleanest, and an affordable, alternative to traditional marine fuels available today. That is why we look forward to building on our strong long-term partnership with QP, expanding the LNG marine fuel network and creating a safe supply chain.â€
Wave LNG Solutions LLC was established by Qatar Petroleum for the purpose of market development and investment in LNG as a transportation fuel, especially for the marine transportation sector.