Scale Gas and Peninsula announce the signing of an agreement for the construction, joint ownership and charter of an LNG bunkering vessel that will provide services in the Strait of Gibraltar
- Enagás, through its subsidiary Scale Gas, and Peninsula, have reached an agreement for the construction and joint ownership of a liquefied natural gas (LNG) supply vessel
- The companies have also agreed to charter the 12,500m3 capacity vessel exclusively to Peninsula
- The ship will be built in the Hyundai Mipo Shipyard with delivery scheduled for June 2023
- Peninsula will supply LNG as marine fuel to vessels at the Port of Algeciras and in the Strait of Gibraltar
- The project is co-financed by the European transport aid program Connecting Europe Facility (CEF)
Enagás, through its subsidiary Scale Gas, and Peninsula, one of the largest global suppliers of marine fuels, have reached an agreement for the construction and joint ownership of a 12,500m3 capacity liquefied natural gas (LNG) supply vessel which will operate in the Strait of Gibraltar and be based in Algeciras Port.
The vessel will be chartered exclusively by Peninsula through an initial seven-year contract, and will use Enagás’ regasification plants, predominantly in Huelva, as LNG loading points. The vessel is expected to be delivered in June 2023 by leading South Korean shipyard Hyundai Mipo.
This agreement represents an important advancement in Scale Gas’ strategic plan as a developer of small and medium-scale LNG infrastructure. In addition, it represents a significant step in Peninsula’s transition towards a more sustainable future through the implementation of new fuels and services. Peninsula’s involvement in the build and co-ownership of this LNG vessel is in complete alignment with its recently updated business strategy.
Financing from the European Union
The initiative is part of the European Union’s transport aid program, Connecting Europe Facility (CEF), which has contributed 11 million euros towards the vessel development through a consortium of Enagás, Scale Gas and the Algeciras Port Authority. This agreement is part of the ‘LNGhive 2’ strategy, led by Puertos del Estado, whose 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 to improve quality the air of the sea and ports.
Sustainable transition
LNG is a fuel that complies with the current regulation of the International Maritime Organization (IMO 2020), which introduced the limit of 0.5% sulphur content in marine fuels. Peninsula is the benchmark for compliance and regulation in the bunker industry.
Compared to traditional marine fuels, liquefied natural gas practically eliminates sulphur oxide (SOX) emissions, reduces nitrous oxide (NOX) by 80-90% and CO2 emissions by 20-30%. The use of LNG as a marine fuel in Spain will result in the reduction of emissions by 2030 of about two million tons of CO2, the equivalent of replacing more than one million combustion vehicles with electric vehicles.
As Marcelino Oreja, CEO of Enagás has stated, “the signing of this agreement is in line with Enagás’ commitment to promoting the development of a value chain that allows more efficient and sustainable maritime transport, and reinforces the commitment of the company to achieve carbon neutrality by 2040.”
John A. Bassadone, owner and CEO of Peninsula highlighted that “this project is one of many initiatives around Peninsula’s strategic pillars: customer centricity, sustainability and technology”, and added that “Peninsula and Enagás share a vision to develop the use of LNG as a maritime transitional fuel and having the support of a company like Enagás is an incredibly positive and exciting development. As one of the largest physical suppliers of marine fuels globally, this is the first step of our transition to a more sustainable future. This vessel will hopefully be the first of many that will offer flexibility and solutions across our global network to our customers.”
Oscar Maciñeiras, CEO of Scale Gas said, “this agreement is the culmination of a three-year project that consolidates Scale Gas as a relevant player in investment in LNG bunkering infrastructures, one of its major strategic lines.”
The support of Enagás through its subsidiary, Scale Gas, the participation of Peninsula, and European Union funding have been key in finalising this deal. Delivery of the LNG bunkering vessel in 2023 will provide a stable flow of LNG to one of the world’s busiest shipping lanes. Critically, it connects Spain’s LNG regasification network with Peninsula’s worldwide customer base. Furthermore it reduces the region’s CO2 emissions, and is an important first step towards complete de-carbonisation of the maritime transport industry by 2050.
