Pilbara Clean Fuels Pty Ltd (PCF) on Friday (3 February) said it is pursuing development of an electrified liquefied natural gas (eLNG) plant in Port Hedland, Western Australia, principally for the production of marine bunker fuel.
The firm said it has received preliminary results from the pre-feasibility studies being conducted by Technip Energies and other contractors, and is currently targeting the end of March 2023 for completion of the first stage study phase.
Large Ore Carrier (LOC) vessels transport dry bulk product from Port Hedland mainly to China, South Korea and Japan. With the drive for international shipping to switch to lower emissions fuel alternatives, the use of LNG as a bunker fuel is increasing rapidly. However, LNG bunker fuel supply availability is a key element. The Project is in response to anticipated demand at Port Hedland, thereby enabling LOC’s to complete round-trip voyages to North Asia and back on a single bunker.
On 5 January 2023, PCF announced it had signed an exclusive MoU partnering with Oceania Marine Energy (OME), a firm developing a marine bunkering service capability based on the charter and operation of purpose-designed LNG bunker vessels. OME’s re-fuelling concept is ship-to-ship bunkering of LOC’s while at anchor off Port Hedland.
By adopting an electrified plant concept and outsourcing its power supply from predominantly renewable sources, the design aims to minimise Scope 1 and 2 GHG emissions. Another key feature is a ‘toll-processing’ business model. The Project proposes to convert third-party owned Western Australia sourced natural gas into marine fuel LNG under long term tolling contract arrangements.
The worldwide iron ore, steel-making and associated supply chain is under increasing pressure to reduce its overall lifecycle GHG emissions. The Project provides an attractive new Western Australia based capability to respond to one of the ‘hard to abate’ parts of the supply chain.
The Project can be seen as implementation of the Western Australian Government’s stated desire for LNG bunkering. A legitimate new use for relatively low-cost natural gas to add value to the State’s mineral resource exports as a result of substantial lowering of overall lifecycle GHG emissions compared to other minerals exporting locations.
PCF expects to be able to announce commercial progress of the Project once the result of the initial pre-feasibility work is finalized, leading to further engagement with State Government, Pilbara Ports Authority, international shipping industry representatives, investors and other stakeholders.
PCF Managing Director, Robert Malabar, said: “We are pleased to be able to report encouraging progress of the pre-feasibility study work, along with favourable interest in the project shown by the International Shipping Industry community. The project follows the industry precedent, already set, for the novel commercial model where a minerals exporter has arranged LNG bunkering for its chartered shipping, initially in an ‘off-route’ third country. The project provides the opportunity for similar but enhanced value as a result of a new ‘en-route’ LNG bunkering capability.”
Related: Oceania Marine Energy and Pilbara Clean Fuels sign MoU for LNG marine fuel bunkering
Related: Australia: McGowan Government advancing to establish LNG bunkering hub in Pilbara
Photo credit: Technip Energies
Published: 7 February, 2023
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