LNG infrastructure provider DNG Energy plans to commence LNG bunkering operations in South Africa’s largest bunkering port, Algoa Bay, in the second quarter of 2020.
As explained, DNG Energy’s development of LNG bunkering facilities at Algoa Bay utilizes Africa’s abundance of natural gas reserves to overcome the shortage of infrastructure as a barrier to the adoption of LNG as a fuel.
The company believes that South Africa would become “a major global force for LNG bunkering within the commercial shipping industry”.
The initiative will improve access to LNG bunkers for commercial vessels on one of the world’s most traveled trading routes, which see 56,000 vessels transit the region every year.
The announcement comes after DNG Energy secured a bunkering license within Algoa Bay. It also follows the last year’s order for the construction of an 8,000-ton LNG bunker barge to service the region. Scheduled to become operational in 2020, it is the largest vessel by weight to be built on the African continent so far, according to the company.
As part of DNG Energy’s wider LNG development strategy and a five-year initiative launched in 2015, the company is investing more than USD 5 billion by 2020 in infrastructure programs across South Africa, Nigeria and Mozambique, funded through a blend of owned and institutional infrastructure capital.
“The shipping industry faces significant challenges in meeting global sulphur regulations from 2020, as well as ambitious decarbonisation and wider sustainability targets towards 2050. It is increasingly evident that LNG as a marine fuel has an important role to play on this pathway,” Aldworth Mbalati, Founder and CEO of DNG Energy, commented.
“As a major global maritime hub, the development of LNG bunkering infrastructure in Algoa Bay is therefore a natural step in expanding Africa’s LNG value chain, directly supporting the growth of LNG-fuelled shipping on multiple trade routes and delivering against the industry’s, as well as Africa’s sustainability goals.”
The African LNG market holds 7.1 percent of proven global gas reserves and is expected to contribute nearly 10 percent of global production growth through to 2024. Rovuma Offshore Area 1 Block (Area 1) in Mozambique is the single largest LNG project ever approved in Africa and one of the world’s biggest natural gas fields.
“Given LNG’s impressive environmental credentials and natural abundance in Africa, as well as its growing uptake globally, the business case for expanding LNG bunkering infrastructure continues to hold weight and we are confident in South Africa’s ability to support the global LNG network in powering international ocean-going trade,” Mbalati concluded.