This article first appeared in The Edge Financial Daily on September 13, 2019

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) is slated to operate its maiden liquefied natural gas (LNG) bunkering vessel (LBV) in the region next year, as it gears up to provide commercial bunkering services in Malaysia from 2020 onwards.

Petronas’ shipping arm, MISC Bhd, is partnering Avenir LNG Ltd to charter a 7,500-cubic metre LBV to conduct vessel bunkering in the region, said Petronas LNG marketing and trading vice president Ahmad Adly Alias.

“It [Petronas LBV] will be the first to operate in the region, and bring us closer towards realising our LNG bunkering aspiration,” Ahmad Adly told reporters at the Green Shipping Conference 2019 here yesterday.

In a nutshell, LBVs can conduct ship-to-ship fuelling for LNG-powered ships.

Ahmad Adly said that the lifting of LNG by LBVs can be done in either of Petronas’ two regasification terminals in the country.

Earlier, Ahmad Adly said during the conference’s keynote speech that Petronas’ regasification terminal (RGT) in Sungai Udang, Melaka is expected to be ready for LNG reload activities by the first quarter of next year.

This follows the readiness of the other RGT in Pengerang, Johor, which has already seen the lifting of LNG by LBV Kyros — the world’s largest — in October 2018.

“In addition, RGT Pengerang will be equipped with LNG filling stations for trucks and

International Organisation for Standardisation containers to support small and remote bunkering requirement,” he added.

While he did not disclose the current and targetted utilisation rate of RGTs, Ahmad Adly said Petronas has already signed on with “a few” customers for the vessel bunkering service.

“We are still working towards building up the volume,” he said, adding that Petronas Dagangan Bhd will act as the ‘touchpoint’ which will conduct the bunkering service.

The push for LNG — a zero-sulphur fuel — as shipping fuel, is concurrent with the upcoming International Maritime Organisation 2020 regulation to enforce low sulphur emission from vessels beginning next year.

Petronas is among the largest LNG producers in the world, with reserves in both Peninsular Malaysia and Sabah and Sarawak.

On a related matter, Ahmad Adly said the government could help provide more incentives for vessel owners to convert their ships to LNG-powered systems.

“Singapore has introduced an incentive to offer grant of S$2 million (RM6.05 million) to convert [to LNG-fuelled vessels].

“We are trying to get the government to provide more incentives to shipowners [to encourage them to do the same],” he said.

Incentives provided in Malaysia include the Green Port Policy by the Johor Port Authority, where incentives such as lower tariff is imposed on visiting vessels that use clean fuel.