Shell ups its game in marine supply space

Shell has taken steps recently to strengthen its position as a future source of LNG supplies in Europe and Asia, reports Newsbase’s Global LNG Monitor (GLNG). The super-major’s Shell Western LNG subsidiary announced in early October that it had signed a new LNG supply agreement with UK cruise shipping line Carnival. The LNG will be used to fuel two new cruise ships, which Carnival will take ownership of in 2019 to work on north-west European and Mediterranean routes.

It is believed the two large cruise liners will be the world’s first cruise industry dual-fuel passenger liners to use LNG as fuel both in port and at sea. Shell already has an LNG supply relationship with Carnival through a deal signed in April 2016 to supply the AIDAPrima with LNG to power the vessel while in dock.

Under the terms of the latest LNG supply agreement, one of the new Carnival cruise ships will refuel from a new 6,500 cm capacity LNG bunker vessel, owned by Shell, that will load LNG at Rotterdam”s Gate LNG Terminal. The second ship will refuel at a Western Mediterranean port, most likely in Spain or France, where there are established ship-refuelling facilities, operated by Enagas and Elengy respectively.

North-west Europe is a growing centre for the LNG-as-fuel market, driven by strong European Union support for cleaner fuels for commercial transportation, particularly trucks and ships, to reduce carbon and nitrogen emissions. The region’s substantial LNG import capacity allows it to respond quickly to LNG demand changes.

Shell is also engaged in a venture to operate 15 barges taken on time charter from shipping group Plouvier Transport and Intertrans Tankschiffahrt, which will refuel at Gate LNG Terminal. It is also using LNG-fuelled supply ships to support offshore oil and gas production activities in the US Gulf.

The Shell-Carnival deal is noteworthy in that it sets up the first LNG-fuelled cruise ships coming into the market. This signals the opening-up of a further segment of the global shipping market to LNG consumption.

Commenting on the new agreement, Shell’s general manager for downstream LNG, Lauran Wetemans, said the company had been “working closely with Carnival to get to this point in our commercial partnership. Working together from an early stage is critical in helping the transition to cleaner LNG cruising”.