BHP Group expects to receive three more bulk carriers powered partly by liquefied natural gas (LNG) in the next six to nine months, part of the company’s plans to cut emissions from shipping, a senior executive said.

BHP, which received its first two LNG-fuelled vessels earlier this year, has locked in some term supplies of LNG buffering the company from volatile prices and is studying the potential for biofuels, Fergus Eley, BHP’s Head of Maritime Enterprise, told Reuters on the sidelines of the Singapore International Bunkering Conference and Exhibition (SIBCON) 2022.

The world’s largest miner and shipper of dry bulk commodities is targeting net zero greenhouse gas emissions from its operations by 2050 and started using LNG to fuel ships carrying products from Australia to China this year.

BHP will receive delivery of the three additional carriers from shipowner Eastern Pacific Shipping by mid-2023, Eley said.

LNG will be a key transition fuel choice for BHP, he said, despite the price volatility in the market over the past two years.

Asian LNG spot prices LNG-AS are at their highest on a seasonal basis since at least 2010, as Europe has been boosting LNG imports to replace Russian gas since the outbreak of the conflict in Ukraine.

“The volatility we are seeing at the moment is really unprecedented,” Eley said. The company has locked in some term supplies to cushion the impact from spot price volatility while BHP takes a long-term view on the lower-emitting fuel, he added.

BHP is looking at opportunities for ships to take biofuel for bunkering in Singapore, especially for voyages to the east coast of Australia and to Europe.

“We have conducted one or two (biofuel) trials in the last 12 months, and we are now working on a larger contract,” he said.

However, limited economies of scale remain a key challenge for the industry to adopt biofuel for bunkering in Asia, where it is still less readily available compared with Europe.

“We can help create that demand and we’re doing so by forming these contracts where some of our vessels that go through to Europe, bunker here in Singapore with biofuel,” Eley said. BHP hopes to reduce emissions by 20% for long-haul voyages using biofuel.

Source: Reuters