Qatar Petroleum (QP) and Shell subsidiaries on Wednesday signed a shareholder agreement to establish an entity that would provide LNG (liquefied natural gas) bunkering services across the globe.
The agreement signed by QP’s “Wave LNG Solutions” and “Shell Gas and Power Developments” paves the way for the establishment of a joint venture company owned equally by both parties, subject to customary regulatory approvals.
The new company’s principal business activities will include the procurement of LNG, setting up LNG bunkering infrastructure (storage and bunker vessels) at various strategic locations around the world, and facilitating the sale of LNG as a marine fuel to end customers around the world.
LNG bunkering provides the shipping industry with a unique fuel that helps meet the industry’s environmental and economic objectives. An increasing number of ship owners and operators are turning to LNG over traditional marine fuels in response to tighter sulfur and nitrogen oxide emissions regulations.
"We see LNG bunkering as a promising solution for the shipping industry in light of a continuously evolving regulatory environment, and as an important opportunity to enhance LNG’s position as a clean energy source, particularly in maritime transportation,” said HE Saad Sherida al-Kaabi, the Minister of State for Energy Affairs as well as the president and chief executive of QP.
Highlighting that LNG demand for bunkering is expected to grow "significantly" over the coming years, he said "we believe there is a real potential for such demand to reach 35mn tonnes per annum by 2035."
"This requires focused investments and collaboration among all industry players to provide the required solutions our customers are looking for. In addition, the right partnership model, similar to the one we are establishing today with our partner, Shell, will also be pivotal in maturing this business,” al-Kaabi said.
Ben van Beurden, Royal Dutch Shell’s chief executive said the shipping industry is starting to make the very necessary strides to reduce emissions from vessels.
Finding that LNG is already playing an important role as the cleanest, and an affordable, alternative to traditional marine fuels available today; he said "that is why we look forward to building on our strong long-term partnership with QP, expanding the LNG marine fuel network and creating a safe supply chain.”
Wave LNG Solutions was established by QP for the purpose of market development and investment in LNG as a transportation fuel, especially for the marine transportation sector.
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