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New JIP aims to develop LNG fuelled Capesize concept for the Australia-China trade

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Green Corridor LNG JIP Signing
The signing ceremony. From left to right: Chen Gang, Technical Manager from SDARI, Toshiaki Tanaka, Executive Officer, Deputy Director General, Dry Bulk Business Unit from Mitsui O.S.K. Lines, Steen Lund, Regional Manager South East Asia, India and Pacific from DNV GL – Maritime, Mike Utsler, Chief Operating Officer from Woodside Energy, Abdes Karimi, Freight Operations Manager from BHP Billiton, and David O’Brien, Freight Manager from Rio Tinto Marine, at the signing ceremony.
New regulations on limiting sulphur and nitrogen oxides emissions and a burgeoning global infrastructure are adding to the growing momentum for the more widespread adoption of LNG as a marine fuel. A new joint industry project (JIP) signed recently in Singapore between BHP Billiton, Mitsui O.S.K. Lines, Rio Tinto, SDARI, Woodside, and DNV GL, looks to capitalize on this opportunity to drive the development of the market. The JIP is named “Green Corridor” and will assess the commercial potential of LNG fuelled vessels in a “green corridor” between Australian and China, culminating in the creation of a next generation Capesize design that will undergo Approval in Principle (AiP) under the new DNV GL rules.
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“As we approach the entry into force date for sulphur emissions, we are seeing interest in LNG as a ship fuel start to climb again,” says Morten Lovstad, DNV GL – Maritime Business Director Bulk Carriers. “As one of the largest LNG exporters in the world and with bunkering infrastructure coming online, Australia is well placed to support the bulk trade on the west coast with LNG as fuel. By working together with some of the industry’s technology leaders we are confident this new project has the potential to deliver a competitive, compliant and safe vessel and the business case to back it up.”

Woodside COO Mike Utsler said Woodside was excited to be a part of this joint industry project to be led by DNV GL: “We recognise that LNG as a transport fuel option presents opportunities, both in a commercial sense and as a low-emissions alternative to other marine fuels. This JIP importantly is bringing together mining companies, a shipowner and supplier, a ship designer and LNG producer and led by DNV GL to explore how we can develop the LNG fuelled 'Green Corridor'. Woodside is this year taking delivery of the first LNG fuelled marine support vessel in the Southern Hemisphere and we look forward to the findings from this joint industry project on the potential for LNG fuel use by bulk carriers,” he said.
The JIP has two main objectives – building and assessing the business case of LNG as fuel for Capesize bulkers operating in the trade between Australia-China, and developing an efficient LNG fuelled Capesize concept design. These activities will be run together, with the immediate results generated from one project fed into the other.

The financial and technical feasibility study examines a LNG fuelled Capesize bulker operating from Australia. It will look at a wide range of factors including the capital costs, operational costs and price sensitivities in terms of LNG and low sulphur marine fuel oils, in comparison to both a conventionally fuelled vessel and a LNG retrofit, as well as undertaking a high level bunker supply chain assessment to identify the key issues affecting the vessel design and business case.

The project partners will also work to develop a concept design for an efficient LNG fuelled Capesize vessel. The ship will be optimized for operations from and to Australia, and will be developed to a technical stage so that it may achieve an Approval in Principle (AiP) in compliance with the new DNV GL rules. An Approval in Principle is an independent assessment of a concept within an agreed framework, confirming that the design is feasible and no significant obstacles exist to prevent the concept from being realized.

About BHP Billiton

BHP Billiton is a leading global resources company. The company is among the world's largest producers of major commodities, including iron ore, metallurgical coal, copper and uranium, and has substantial interests in conventional and unconventional oil and gas and energy coal.

About Mitsui O.S.K. Lines, Ltd.

Mitsui O.S.K. Lines, Ltd. (MOL), founded in 1884, is one of the world's leading shipping companies headquartered in Tokyo, Japan. The company operates more than 800 of various types of vessels,including tankers, dry bulkers such as iron ore carriers, coal carriers and woodchip carriers, liquefied natural gas (LNG) carriers, car carriers and container ships. MOL and its group companies also provide business other than international shipping, terminal and logistics services, cruise ships, ferries, coastal liners and others. For more information, please visit http://www.mol.co.jp/en/.

About Rio Tinto

Rio Tinto is a leading global mining and metals group that focuses on finding, mining, processing and marketing the Earth’s mineral resources. We have been in business for more than 140 years and remain focused on a long-term horizon. Our approach is driven by an enduring and proven strategy. It sees us invest in and operate long-life, low-cost, expandable operations in the most attractive industry sectors. Our world-class assets are run by a company of world-class people: a 55,000-strong workforce spanning more than 40 countries. We foster a culture where our people keep their safety, and that of their workmates, at the top of their minds; where every person understands how they can create and preserve value for the business; and where diversity and innovation are embraced. We produce a diverse suite of minerals and metals that enable the world to grow and develop. Our contribution to sustainable development is integral to how we do business. It is a fundamental consideration in how we manage the business, seeking long-term mutually beneficial outcomes for our business and our stakeholders. Our approach is underpinned by our values of respect, integrity, teamwork and accountability. Combined with the strength provided by our people and our assets, they help form the foundations of our long-term success.

About SDARI

SDARI is a ship design consultant under China State Shipbuilding Corporation (CSSC) with more than 600 employees. SDARI is the market leader in merchant ship design and development in China and has accumulated more than 1,000 as-built designs in the past five decades. For more information visit the website sdari.cssc.net.cn or send an email.

About Woodside

We are Australia’s most experienced liquefied natural gas operator, with a reputation for reliability, efficiency and operational excellence. Our producing assets in Australia include the landmark North West Shelf Project, which has been operating since 1984. In 2012, we commenced production from the Pluto LNG Plant and expect to add additional volumes from our non-operated Wheatstone LNG interests in mid-2017. We have significant equity interests in high-quality development opportunities in Australia, Canada, Senegal and Myanmar and operate a fleet of floating production storage and offloading vessels. Our global exploration portfolio includes emerging and frontier provinces in Australia and the Asia-Pacific region, the Atlantic Margins, Sub-Saharan Africa and Latin America. We continue to expand our capabilities in marketing, trading and shipping and have enduring relationships that span more than 25 years with foundation customers throughout the Asia-Pacific.