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Keppel Offshore & Marine (Keppel O&M) has secured contracts to build its first two dual-fuel, diesel-LNG harbour tugs. The two tugs are expected to use bunkering services provided by the Keppel-Shell joint venture company, FueLNG Ltd (FueLNG).

First dual-fuel tugs

Keppel O&M's wholly owned subsidiary Keppel Singmarine Pte Ltd (Keppel Singmarine) secured the tug contracts from Keppel Smit Towage Pte. Ltd (Keppel Smit) and Maju Maritime Pte. Ltd. (Maju), who have ordered one unit each.

The tugs will be built to Keppel's proprietary design which won the Outstanding Maritime R&D and Technology Award at the 2015 Singapore International Maritime Awards. The Maritime and Port Authority of Singapore is co-funding up to S$2 million for each tug under its LNG Bunkering Pilot Programme (LBPP) Grant. The vessels are expected to be completed in 2018.

Commenting on the news, Mr Chow Yew Yuen, Chief Executive Officer of Keppel O&M, said: "We are happy to secure orders to build our first two dual-fuel tugs which will be built to Keppel's award-winning proprietary designs. Keppel has a strong in-house research & development (R&D) unit that has developed innovative designs including LNG carriers and barges to meet the maritime industry's needs as the demand for green solutions and LNG rises. Combining this R&D capability with our rich shipyard expertise, we will continue to seize opportunities along the LNG value chain and help owners deliver LNG efficiently to end markets.

"We are also happy that our joint venture, FueLNG, has secured its first two contracts from Shell to provide bunkering services for Keppel Smit and Maju's dual-fuel tugs. Together, Keppel's shipbuilding/design capabilities and LNG bunkering services provide end-to-end solutions for vessel owners turning to LNG as a marine fuel in Singapore."

FueLNG is a new 50-50 joint venture company incorporated by Keppel and Shell which secured a license as one of only two companies to provide LNG bunkering services in Singapore.

For Keppel Smit and Maju's dual-fuel tugs, FueLNG will be providing LNG bunkering services while Shell will be supplying the LNG fuel over a period of 10 years under separate contracts with the towage companies.

MoU with Shell

Keppel O&M, through its subsidiary Gas Technology Development Pte. Ltd., has also signed an MoU with Shell's subsidiary, Shell Eastern Petroleum (Pte) Ltd, to jointly explore potential opportunities to cater to the demand of LNG as a fuel in coastal areas, inland waterways and the international marine sectors.

Michael Chia, Managing Director (Marine & Technology) of Keppel O&M, said: "Apart from relying on our in-house R&D, we are collaborating with leading players in the energy sector that have capabilities complimentary to Keppel's to develop comprehensive and innovative solutions in LNG. Through this cooperation framework, Keppel and Shell can combine our resources and expertise as a leading global shipbuilder and energy supplier, and work together in collaboration with stakeholders such as shipping companies, terminal operators, local governments and regulators to meet their needs which may include engine retrofit or setting up coastal LNG storage infrastructure."