M Hanafi Jamal, Head of Fleet Management, PETRONAS LNG talks to SGMF on why they believe that LNG is the fuel of the future and the value on becoming an SGMF member.
Petroliam Nasional Berhad (PETRONAS) is Malaysia’s premier energy and solutions company ranked amongst the largest corporations on the Fortune Global 500®. The company’s portfolio spread across the entire energy sphere including conventional and unconventional resources covering a diverse range of fuel, lubricant, and petrochemical products. Since 1974, the company has built capabilities across the oil and gas value chain as well as exploring opportunities in hydrocarbon investments across the globe including investment to diversify offerings in Liquefied Natural Gas (LNG).
Aware of the fact that the world is in dire need for cleaner sources of energy, PETRONAS continues to address the rise of such demand for a future that is sustainable. Today, PETRONAS is one of the world’s leading LNG players and partners thanks to its end-to-end capabilities across the integrated business value chain allowing efficient and reliable delivery of energy.
In recent years, PETRONAS has set its sights on establishing Malaysia as an LNG bunkering hub and is undertaking several initiatives to advocate the use of LNG as the preferred marine fuel. 2020 will be the year where the company is ready to provide LNG bunkering services in support of the government’s ambition towards making Malaysia a bunkering hub.
SGMF talks to M Hanafi Jamal, Head of Fleet Management, PETRONAS LNG from the Gas and New Energy Business of PETRONAS about the company’s aspiration, activities and recent developments in the LNG sector.
Why is PETRONAS a member of SGMF?
LNG is not only abundant, in fact it is a game changer given the fact that it emits zero sulphur when burnt, making it a strong contender to the traditional bunker. This further strengthens its market potential while competing with other sources of conventional fuel. As one of the key players in the LNG space, we believe that we can contribute significantly in promoting the use of gas fuel in the marine industry through active participation in SGMF. At the same time, SGMF provides a good platform for the sharing of knowledge and expertise in ensuring standardisation of safe practices and effective knowhow in handling gas fuel by the industry. We support and encourage the use of gas fuel (especially LNG) as the cleaner fuel for the industry to meet environmental requirements in the foreseeable future.
M Hanafi Jamal
Head of Fleet Management,
Why does PETRONAS believe that LNG is the fuel of the future?
In PETRONAS, sustainability is at the core of the things that we do as we believe that harnessing good energy adds value to everyday lives. Energy shift is happening, and it is moving fast, hence we believe that LNG can coexist with renewables because it is abundant and cleaner compared to other fossil fuels. Therefore, we invest fully in unlocking the potential of LNG for a future that is sustainable and will continue to further advocate the use of LNG to ensure sustainable growth and build an environmentally friendly eco-system.
According to United Conference on Trade and Development, it is estimated that 85% out of the USD$20 trillion global trade is attributed by the shipping industry. However, it comes with a price. It brought inevitable harmful pollution to the environment via greenhouse emissions of 846 million tonnes of carbon dioxide and 5.3 million tonnes of Sulphur oxide. This is why the shift to a cleaner source of marine fuel is necessary and LNG is the answer. With IMO 2020 regulations coming in effect in January 2020, there is no better time for industry players to seriously consider switching to LNG.
PETRONAS advocates the use of LNG as the fuel of choice for marine transportation (not only for LNG carriers). We also promote the use of LNG as fuel for Upstream Offshore support vessels (OSV), as well as collaborating with shipping companies in advocating the construction of LNG fueled vessels.
How does PETRONAS support the marine industry’s use of LNG fuel?
For LNG to be a fuel of choice for the marine industry, a sustainable eco-system needs to be developed to support this aspiration. Being a long-term player and one of the major LNG producers globally, we are well positioned to supply and advocate the use of LNG and collaborate with the players in the marine industry and relevant stakeholders including the government to in marketing LNG as the fuel of choice.
We are actively working towards developing a global network of LNG bunkering supply chain through smart partnerships with port operators and international industry players. As part of an effort to promote the use of cleaner fuel like LNG in ports and its facilities, we are offering special tariff and utilisation of LNG powered tugs and vehicles as per the Green Ports Policy agenda.
We are also working with our partners to develop a global network of LNG Bunkering points to support the industry, whilst at the same time we are putting in place the necessary infrastructure to support LNG Bunkering in Malaysia. To further encourage the industry, we are placing requirements for future vessels that are to be engaged with PETRONAS, to have preference for LNG-fueled vessels.
As a member of the Society of Gas as Marine Fuel (SGMF), we are also working towards standardising the LNG fueling facilities and operations which will be the benchmark for ‘LNG fueling stations’ for marine transports.
How is PETRONAS working to establish Malaysia as a global LNG bunkering hub?
Leading by example, we have begun advocating the conversion to cleaner fuels since 2017 to ensure the company complies to the limit of Sulphur content in marine fuel to 0.5% from existing 3.5% by mass endorsed by the International Maritime Organisation (IMO) and to be made effective commencing 1 January 2020. Concurrently, we have also started to convert all of our 22 LNG vessels to use compliant fuels via the compliance fuels supply programme.
All these are to prepare us as we embark on the initiative to establish Malaysia as an LNG Bunkering hub, focusing among others the setting up of the necessary infrastructures in Pengerang, Johor and Sungai Udang, Melaka; deflating the old-age argument of ‘chicken & egg’ situation.
Through our subsidiary, PETRONAS LNG Ltd. (PLL), we have achieved a significant milestone with the successful completion of our first LNG supply operation at the Regasification Terminal Pengerang (RGTP) on 28 October 2018.
Our existing RGTP in Johor, recently passed its first milestone of carrying-out a reloading operation through the lifting of LNG by the world’s largest LNG Bunker Vessel (LBV) Kyros on 27 October 2018, demonstrating our readiness to support reloading of LNG for bunkering activities. In addition, RGT Pengerang will also be equipped with LNG filling stations for trucks and ISO containers to support small and remote bunkering requirement.
We are also in the midst of upgrading our RGT Sungai Udang to be capable of performing LNG reloads by Q1 of 2020, establishing our second LNG bunkering hub. These two locations will allow PETRONAS to supply LNG as bunker to the marine industry, effectively, responsively and at the same time, expanding our supply in the Asia bunker market.
We are chartering Avenir LNG and Malaysia International Shipping Corporation (MISC)’s 7,500-cubic meter newly built LBV to provide bunkering needs to any LNG-fueled vessels transiting our waters and operating across Malaysia. The LBV can also be utilised for transportation services for small scale terminals in the region and other auxiliary services such as gas-up cool-down requirement (for LNG vessels).
This LBV will be the first to operate in the region and to bring us closer towards realising our LNG Bunkering aspiration. The LNG reload operation into the world’s largest LBV, demonstrated the flexibility of RGTP in reload operation and the capability to receive small-scaled LNG ships, further positioning PETRONAS among the leaders in the LNG bunkering segment to meet the changing landscape of the marine fuel market.
PETRONAS, together with the Malaysian Marine Department has coordinated a series of workshops in establishing LNG Bunkering Simultaneous Operations (SIMOPS) Guidelines that will allow for a safe and effective LNG bunkering during vessels’ regular port operation. In addition, the development of Training & Competency Guidelines on LNG fueled ship are being pursued by PETRONAS together with the industry.