State-owned Qatar Petroleum and the Netherlands-based oil and gas company Shell are forming a joint venture for global LNG bunkering services.
Signed by Qatar Petroleum’s Wave LNG Solutions and Shell Gas & Power Developments B.V. on September 18, the agreement paves the way for the establishment of the joint venture company owned equally by both parties.
The new company will focus on 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 marine fuel to end customers around the world.
“We 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 LNG’s position as a clean energy source, particularly in maritime transportation, ” Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, the President & CEO of Qatar Petroleum, said.
He added that LNG demand for bunkering was expected to grow significantly over the coming years, with a potential for such demand to reach 35 million tons per annum by 2035.
The joint venture announcement is in line with Qatar Petroleum’s push to expand its LNG business. Earlier this month , the company signed a long-term LNG unloading services agreement for Zeebrugge LNG terminal with Fluxys Belgium.
Earlier this year, Qatar Petroleum issued a tender that could see shipyards eventually build over 100 LNG carriers in the next decade.
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.
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. Shell Gas & Power is part of Royal Dutch Shell responsible for energy and natural gas trading.