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Enagás to receive USD 13.4 million from EU to co-finance LNG bunker vessel newbuild

23 Dec 2020

Spanish energy company Enagás SA on Tuesday (22 December) said the European Commission has signed a grant agreement with Enagás and the Port Authority of the Bay of Algeciras agreeing to co-finance the construction of a liquefied natural gas (LNG) bunkering vessel in the Port of Algeciras.

This project is promoted by a subsidiary of Enagás specialising in small-scale LNG supply infrastructures, Scale Gas, and the Algeciras Bay Port Authority (APBA).

The initiative, coordinated by Enagás, is part of the ‘LNGhive2’ strategy, led by Puertos del Estado, and the European Union’s transport aid program Connecting Europe Facilities (CEF 2019 call), will finance 20% of its execution, approximately EUR 11 million euros (USD 13.4 million).

The objective is to support the development of the LNG market as a sustainable marine fuel, in line with the European Directive 94/2014 on alternative fuels.

The project consists of the construction of a barge with a storage capacity of 12,500 cubic meters of LNG, as well as its commissioning in 2023. Once in operation, the ship will use the Enagás terminal in Huelva to load LNG.

From there, the vessel will supply LNG directly to final consumers or reload barges for supply to smaller ships docked at the port of Algeciras.

In 2012, the Port of Algeciras made the first supply of LNG as fuel for ships in Spain by tanker truck, a form of LNG bunkering called Truck to Ship (TtS).

In 2020, seven TtS LNG supply operations were carried out in Algeciras and 300% more LNG was supplied to ships compared to 2019. Once operational, this new bunker vessel will allow for Ship to Ship LNG bunkering operations at the Port of Algeciras.

Enagás sees LNG as a solid alternative fuel for the decarbonisation of maritime transport and the cleanest fuel among those currently available for this type of mobility and contributes to improving air quality, especially in ports.

In addition to promoting more sustainable maritime transport and improving air quality in the Bay of Algeciras, this project will mean another step towards consolidating Spain and the Port of Algeciras, the port with the highest freight traffic in Spain, as a European benchmark in bunkering of LNG in the Strait of Gibraltar.

The company notes the European Union supports the key role of LNG in addressing the energy transition of the maritime sector.

With the funds from the CEF call, which have already financed seven projects in Spain, it will be possible to achieve the climate objectives established by the European Green Pact, giving priority to short-sea shipping projects based on alternative fuels, as well as to the installation of power supply systems on land in order for ports to reduce emissions from ships docked.

Related: European Commission to support Barcelona and Algeciras LNG bunkering initiatives

Photo credit: Enagás
Published: 23 December, 2020

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