Total to supply LNG fuel for CMA CGM's future container ships
PARIS (Reuters) — Total will supply LNG to CMA CGM to fuel the container shipping group’s future very large vessels, the French companies said on Monday.
|Photo courtesy of CMA CGM.
CMA CGM had said last month it would use LNG to power the nine extra-large vessels it has on order, a first such move in a shipping industry grappling with how to comply with tougher rules on emissions.
Under the 10-yr agreement, oil and gas major Total will supply around 300,000 tpy of LNG to CMA CGM, starting in 2020, the companies said in a statement.
Financial terms were not disclosed.
CMA CGM’s future container ships, to be among the largest ever built, are due to be delivered from 2020.
Total said it was considering chartering on a long-term basis an LNG bunkering vessel that would deliver fuel both to CMA CGM and other customers in Europe.
LNG has been promoted as an alternative to bunker fuel oil for shipping lines facing a 2020 deadline to meet new international standards on emissions.
The new rules notably reduce maximum sulfur content in fuels to 0.5% from 3.5% now, and CMA CGM says LNG allows a 99% reduction versus standard shipping fuel.
“LNG is the fuel of the future for shipping,” Rodolphe Saade, chairman and chief executive of CMA CGM, said in the statement.
CMA CGM, which is controlled by the Saade family, has said previously that infrastructure is a challenge for adopting LNG. It has received the backing of the French government, which wants to promote LNG fueling in ports.
CMA CGM and Total also said they had reached an agreement in principle on the potential supply of lubricants for the nine future ships.
The two groups had signed a memorandum of understanding earlier this year which called for Total to become a multi-fuel supplier to CMA CGM, providing LNG as well as fuel oil with 0.5% sulfur content.
Total Chairman and CEO Patrick Pouyanne said in Monday’s statement that wider use in shipping fuel was an important part of the group’s LNG strategy.
It last month announced the acquisition of the upstream LNG interests of Engie in a $1.5 B deal set to make Total the world’s second-largest player in the LNG market.
Reporting by Gus Trompiz and Dominique Rodriguez; Editing by Maya Nikolaeva and David Evans
In the business of hydrocarbon production, accurate accounting of produced fluids and gases is critical from a process control, management and fiscal perspective.
The US East Coast will send out its first LNG exports in early 2018 as Dominion Energy’s Cove Point LNG export facility in Lusby, Maryland becomes operational.
The New LNG Imperative
The shale gas boom established the US as the world’s leading natural gas producer and is responsible for billions of dollars of investments in the US gas processing industry. Since 2012, the US has witnessed unprecedented growth in new gas processing capacity and infrastructure. This rise is due to greater production of domestic shale gas, which is providing cheap, available feedstock to fuel the domestic gas processing, LNG and petrochemical industries. New gas processing projects include the construction of billions of cubic feet per day of new cryogenic and gas processing capacity, NGL fractionators, multi-billion-dollar pipeline infrastructure projects, and the development of millions of tons per year of new LNG export terminal construction. Attend this webcast to hear from Lee Nichols, Editor/Associate Publisher, Hydrocarbon Processing, Scott Allgood, Director-Data Services, Energy Web Atlas and Peregrine Bush, Senior Cartographic Editor, Petroleum Economist as they discuss the future of LNG and the application of Energy Web Atlas, a web-based GIS platform which allows users to track real-time information for every LNG project.
November 29, 2017 10am CST
View on Demand