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Quartet launches third regional Japanese LNG bunkering initiative

Mon 06 Aug 2018 by Mike Corkhill

Quartet launches third regional Japanese LNG bunkering initiative
Developers of LNG bunkering projects in Japan can draw on the experience of the country’s coastal LNG carrier operators

NYK Lines, Kyushu Electric Power, Saibu Gas and Chugoku Electric Power have signed a memorandum of understanding as part of a drive to commercialise LNG bunkering in the Setouchi and Kyushu areas of southwestern Japan.

The initiative is the third project launched in Japan recently to develop the use of LNG as marine fuel for ships visiting the country’s ports. Central LNG Shipping Japan Corp (CLS) is promoting LNG fuelling in Japan’s central Chubu region around Nagoya and Ise Bay, and last month ordered the country’s first LNG bunker vessel (LNGBV), while Yokohama-Kawasaki International Port Corp has joined up with Sumitomo and Uyeno Transtech to study the feasibility of LNG bunkering in Tokyo Bay.

The Setouchi region includes the ports of Hiroshima, Iwakuni, Matsuyama, Okayama, Osaka and Takamatsu, while Kyushu is the most southwesterly of Japan's four main islands. Key Kyushu port locations include Hakata, Hososhima, Imari, Kagoshima, Nagasaki, Oita and Sasebo.

Between them, the three utilities in the latest bunkering initiative operate seven LNG receiving terminals in the Setouchi and Kyushu areas. Chugoku Electric is responsible for the Yanai and Mizushima LNG facilities, Kyushu Electric for Oita and Tobata and Saibu Gas for Hibiki, Fukuoka and Nagasaki.

NYK Line provides a strong link to LNG bunkering for the three utility companies. Along with K Line, Chubu Electric Power and Toyota Tsusho Corp, the Japanese shipowner is also a member of the CLS venture that will operate the 3,500-m3 LNGBV ordered at Kawasaki Heavy Industries in July.

NYK Line made its initial play in LNG bunkering in July 2014 when, as part of the Gas4Sea partnership, it placed an order for 5,000-m3 Engie Zeebrugge, the world’s first purpose-built LNGBV. Delivered in February 2017, Engie Zeebrugge is based in the Belgian port of Zeebrugge and is active in northwest Europe.

NYK Line, along with K Line and Mitsui OSK Lines, is also participating in a joint effort by the Maritime and Port Authority of Singapore and the Ports and Harbours Bureau of Japan’s Ministry of Land, Infrastructure, Transport, and Tourism to promote LNG-fuelled shipping in Asia. The work programme includes a feasibility study on LNG bunkering for car carriers plying between Japan and Singapore.

Finally, NYK has already established LNG links with Kyushu Electric Power. In June 2017 the two companies concluded a charter contract under which Kyushu Electric will utilise NYK’s 150,000-m3, 2007-built LNG carrier Grace Barleria for up to 11 years to lift cargoes the utility has bought under long-term sales and purchase agreements, including from the Wheatstone and Gorgon LNG projects in Australia.

At the same time, and in a separate decision, NYK and Kyushu Electric Power agreed to consider the feasibility of co-operation in complementary businesses involving LNG supply and shipping operations, not least LNG bunkering.

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