Woodside to develop LNG-powered shipping in Australia

Australia’s largest LNG operator Woodside expects greater use of liquefied natural gas as fuel in the maritime industries in Australia as the company awaits the delivery of its first LNG-powered vessel.

Perth-based Woodside signed a five-year charter in April for an LNG-powered marine support vessel from Siem Offshore, a Norway-based operator of vessels for the oil and gas industry.

The yet-to-be-named platform support vessel (PSV), capable of being powered by LNG or distillate, is currently under construction in Poland.

Australia’s first LNG-powered marine support vessel will be delivered to Woodside in the first quarter of 2017, the company said in its Trunkline Magazine posted on the Woodside website.

Once delivered, the vessel will transport fuel and cargo from Woodside’s Dampier base to the company’s offshore assets in Western Australia.

Compared to traditional marine fuels such as bunker oil, LNG offers big emission cuts,” said Rob Duncanson, logistics marine manager at Woodside.

He noted that MARPOL (the International Convention for the Prevention of Pollution from Ships) has issued new regulations covering shipping fleet emissions. Plus, there is pressure building to reduce greenhouse gas emissions through international conventions such as those held in Paris last December.

According to Duncanson, there are hopes that Woodside’s charter of just one dual-powered vessel could prove to be a “catalyst for change by awakening both the oil and gas and the marine industries to LNG’s potential as a clean shipping transport fuel“.

The vision is to transition the Australian maritime industry,” said Duncanson, adding that “LNG can tackle the balance of payments at both ends: by exports, and import substitution”.

Australia doesn’t use a lot of LNG in its transportation industry. Yet we export a lot of LNG and import around $2 billion worth of oil and distillates every month.” he said.

Chief operations officer Mike Utsler says survival in a “hugely complex and challenging business climate is about adapting to prevail, especially given the recent sharp adjustments in crude oil prices“.

The Siem charter will help Woodside become a “green marine” company, and is paramount as environmental regulations tightens, he said.

Woodside is an LNG company,” Utsler said, adding that it makes “sense that we also enable the use of LNG in how we operate, through the first LNG-powered support vessel to the Southern hemisphere.”

The biggest obstacle that needs to be tackled is developing a reliable LNG supply chain and overcoming the extra capital costs associated with LNG-fuelled vessels.

“We want to be on the front foot and build LNG capability in this part of the world,” said Nancy Nguyen, contracts and procurement category manager who was involved in the charter negotiations.

This is an example of Woodside and Siem collaborating not just now, but with a view to the future.”



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