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The Maritime and Port Authority of Singapore (MPA) has awarded S$6 million (US$4.49m) to FueLNG Pte Ltd and Pavilion Gas Pte Ltd for the construction of two LNG bunker vessels in a move designed to promote ship-to-ship LNG bunkering in Singapore.

Pavilion Gas and Keppel-Shell joint venture firm FueLNG will each receive a co-funding grant of up to S$3m for their LNG bunker vessel. The two companies were the only two to be awarded an LNG bunker supplier licence by the MPA back in 2016.

The vessels, slated for delivery in 2020, are set to be amongst the first of their kind in Asia.

The allocation of S$6m financing represents the previously announced figure set aside - which is half of a S$12m (US$8.9m) cash injection - to co-fund the construction of new LNG bunker vessels at the Asian port.

The remaining half of the S$12m fund, revealed in December, is to be used to top up the MPA's existing co-funding programme to support the building of LNG-fuelled vessels.

The first S$12m funding for this initiative, launched in 2015, has been utilized to support the construction of LNG-fuelled vessels for Keppel SMIT Towage Pte Ltd, Maju Maritime Pte Ltd, Harley Marine Asia Pte Ltd, Sinanju Tankers Pte Ltd, and, most recently, PSA Marine (Pte) Ltd. It allowed for co-funding of up to S$2m per vessel - S$1m less than the latest S$3m grants for the construction of LNG bunker vessels.

Commenting on the latest development, Andrew Tan, MPA chief executive, said: "LNG is a viable marine fuel solution to meet global environmental regulations such as the International Maritime Organization's (IMO) 0.5% global sulphur cap from 1 January 2020. As the world's largest bunkering hub, we are pleased to support the building of the first two LNG bunker supply vessels for the Port of Singapore. We look forward to the successful applicants contributing to the growth of ship-to-ship LNG bunkering in the Port of Singapore."

Chris Ong, chairman of FueLNG, remarked: "The MPA grant boosts our plans to provide ship-to-ship bunkering in addition to truck-to-ship bunkering for ship owners. Leveraging expertise from both Keppel and Shell, FueLNG aims to provide safe, cost-efficient and reliable solutions in LNG bunkering for global customers who pass through the Port of Singapore, which will encourage the adoption of LNG as a marine fuel."

Frederic Barnaud, Group chief executive officer of Pavilion Energy, commented: "We are pleased to receive the MPA grant for the construction of an LNG bunker vessel. Pavilion Gas' commitment to build its LNG bunkering business and infrastructure in Singapore and globally is a strong signal to shipowners and the bunkering community that LNG is a credible solution to achieve IMO's 2020 ruling."