Photo by: Bloomberg
PERTH (miningweekly.com) – Major BHP has made further moves to reduce its greenhouse gas (GHG) emissions, awarding the world’s first liquefied natural gas (LNG) fuelled bulk carrier tender to Eastern Pacific Shipping (EPS)
The five-year time charter contract would see five LNG-fuelled Newcastlemax bulk carriers carry iron-ore between Western Australia and China from 2022.
The LNG bunkering supply contract is expected to be awarded in October 2020.
BHP COO Vandita Pant said the LNG-fuelled vessels would virtually eliminate sulphur oxide emissions and significantly reduce carbon dioxide (CO2) and nitrogen oxide emissions.
"As one of the largest dry bulk charterers in the world BHP recognises the role we play in working with our suppliers and customers to drive actionable reductions in GHG emissions across the maritime supply chain," Pant said.
"The tender marks a progressive shift for BHP and the broader mining and shipping industry and is a significant step toward lowering GHG emissions in the 1.5-billion-tonne iron-ore seaborne market.
"We expect the introduction of LNG-fuelled vessels will result in more than 30% lower CO2-e emissions on a per voyage basis compared to conventional fuel along the Western Australia to China route."
BHP released the LNG-fuelled bulk carrier tender in July last year and subsequently completed a rigorous due-diligence process to identify and shortlist tenderers. Safety, technical and economic factors, as well as a clear demonstration to make a sustainable positive change for the industry, were among the stringent criteria.
Pant said EPS offered a competitive bid and an efficient vessel design with superior fuel efficiency and GHG emissions reductions.
"The LNG bunkering time charter contract, with a total cost of ownership less than a conventionally fuelled Newcastlemax, will enable BHP to manage the fuel supply risk, build LNG operations capability internally and capture operating expenditure benefits through optimization of voyage operations and fuel utilization," she said.
"As an established provider of marine transportation to the energy market for 60 years, EPS shares BHP’s commitment to lowering emissions in the maritime supply chain and we look forward to working with them to align with the GHG goals of the International Maritime Organisation."
BHP’s switch to LNG-driven ore carriers comes just days after the miner announced plans to reduce emissions from electricity use at its Queensland coal mines by 50% by 2025, signing a renewable power purchasing agreement with Queensland’s state-owned clean energy generator and retailer CleanCo.