Shell and Pan Ocean Continue to Expand LNG-Bunker Vessel Fleet

Shell Tankers is continuing to build out its global fleet of LNG bunker vessels to service the growing ocean fleet of LNG-fueled vessels. The company has entered into an additional charter agreement of Pan Ocean of South Korea for the construction of another LNG bunker vessel at the Hyundai Mipo Dockyard also in South Korea.

Shell and Pan Ocean have been working in unison to develop the global LNG transport and bunkering fleet. The companies announced long-term charters for eight ships in December 2019, followed by six additional vessels of the same class in August 2020. An additional four 174,000 cubic-meter LNG transport ships to be built by Hyundai Heavy Industries and Hyundai Samho Heavy Industries were announced in December 2020.

The Korean news agency Yonhap is reporting that Shell and Pan Ocean signed a new agreement for an 18,000-cubic meter LNG bunkering ship to be built by Hyundai Mipo Dockyard, which will be put into operation for Shell by May 2023. The deal calls for a six-year charter to Shell with an option to extend the operations for two additional years.

Shell operates and manages specialized LNG bunker vessels that deliver to LNG-fueled vessels. The company entered the business in 2017 with a vessel named Cardissa based in Rotterdam, Netherlands. The 394-foot vessel can carry 6,500 cubic meters of LNG fuel. The vessels feature an innovative transfer system and sub-cooler unit. They can load from big or small terminals and can bunker a wide variety of vessels.

According to the trade group Sea-LNG, at the end of 2018 nine LNG bunker vessels were in operation. The fleet has now topped 20 vessels with Sea-LNG reporting a total of 50 LNG bunker vessels either in operation or on order to enter service in the next few years. Currently, the largest fleet of LNG bunker vessels will be in Europe, with 30 operating or planned, followed by 14 planned to be spread broadly across Asia.