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22 February, 2016

Qatar, Maersk and Shell join forces to develop LNG as marine fuel

Qatar and Royal Dutch Shell have agreed to develop liquefied natural gas (LNG) as a marine fuel for use by world's largest container shipping company, A.P. Moller-Maersk.

COPENHAGEN, Feb 22 (Reuters) - Qatar and Royal Dutch Shell have agreed to develop liquefied natural gas (LNG) as a marine fuel for use by the world's largest container shipping company, A.P. Moller-Maersk, Qatargas said in a statement on Monday.

Qatargas, the world's largest LNG producer, said the three companies signed a memorandum of understanding which sees Qatargas 4, a joint venture between Qatar Petroleum and Shell, producing the fuel for use by Maersk Line.

Most shipping companies currently use heavy fuel oil, or bunker fuel, to propel their vessels although LNG as marine fuel has been used by some ships in the past decade.

DNV GL, an international energy and shipping certification agency, says while most of the industry will continue to use heavy fuel oil for now, LNG is being used more, in part because it more easily meets current and proposed emission rules.

In a 2015 report, DNV GL said 63 LNG-fuelled vessels were already operating globally with another 76 ships being built that would use the new fuel. In contrast, Maersk has just under 600 ships operating, including some of the biggest in the world.

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"This cooperation between Qatargas, Maersk Group and Shell represents an important step in developing LNG as a viable fuel for maritime transportation," Maersk's chief executive, Nils Smedegaard Andersen, said in a statement issued by Qatargas.

"The possible use of LNG as fuel for ships presents an opportunity to reduce both SOx (sulphur oxides) emissions and in reducing the transport sector's CO2 (carbon dioxide) footprint."

(Reporting by Sabina Zawadzki; Editing by Greg Mahlich) ((sabina.zawadzki@thomsonreuters.com; +45 3396 9650; +45 2054 8688;))