Mining Giant BHP Scales Back LNG Bunkering Ambitions

The iron ore producer has rowed back from its initial ambitious plans to use LNG bunkering. File Image / Pixabay

Mining conglomerate BHP has rowed back from some of its previously announced plans to use LNG as a bunker fuel on the ships carrying its cargoes, in a blow to an industry hoping to gain more traction this year.

In July 2019 the company announced a tender for LNG-fuelled transport for up to 27 million mt of its iron ore, saying it was seeking to reduce its emissions along the busiest bulk transport route in the world.

"We recognise we have a stewardship role, working with our customers, suppliers and others to influence emissions reductions across the full life cycle of our products," Rashpal Bhatti, vice president for maritime and supply chain excellence at BHP, said in a statement announcing the move a year ago.

"While LNG may not be the sustainable homogenous fuel of choice for a zero carbon future, we are not prepared to wait for a 100% compliant solution if we know that, together with our partners, we can make significant progress now."

Those early ambitions appear to have been tempered somewhat this year as the COVID-19 pandemic changes priorities for much of the global economy.

The company is now just seeking offers for five 208,000 dwt dry bulk newbuildings, according to shipping intelligence service Alphatanker, down from its original plans for 14.

The move will be a disappointment for LNG bunkering advocates, as the nascent LNG bunker industry needs a degree of momentum to keep up the pace of investments in new delivery infrastructure around the world.

"So far, the dry bulk sector has lagged the cruise, ferry, liner and tanker sectors in taking up LNG with many plans put on the table by owners and charterers but no LNG-propelled bulker project has come to fruition as yet," Alphatanker wrote in a note to clients last week.