LNG supplier inks first marine LBG supply contract

The energy company has entered into a one-year contract to supply liquefied natural gas (LNG) and renewable liquefied biogas (LBG) to two LNG-fuelled product tankers under long-term charters to Sweden-based energy company Preem. The tankers will be supplied with a new fuel blend consisting of 90 percent LNG and 10 percent LBG.

The new fuel blend will be supplied via ship-to-ship bunkering performed by Gasum’s LNG bunker vessel Coralius. The fuel is expected to be supplied on an index-linked basis, with a fixed premium for LBG to represent production cost differentials.

“This contract represents a new step in the supply of LBG to our customers. We are able to offer LBG on demand to our customers without any restrictions on volume,” said Jacob Granqvist, Sales Director Maritime in Gasum.

The supply of certified biogas in a blend is attracting increasing amounts of interest. Granqvist noted that Gasum’s digitalisation tools would allow shipowners to allocate environmentally-friendly LBG blends to passengers or containers. “Our customers report increasing interest in LBG and other renewable gases – and this offers shipowners a way of passing on costs to their customers.”

The new fuel blend will be produced at Gasum’s Risavika LNG production plant. Gasum is sourcing the LBG component of the fuel from Danish suppliers at present, The Motorship understands.

The two time-chartered product tankers that will be supplied with Gasum’s blend of renewable maritime fuel are the 14,800dwt Tern Ocean and 7,999dwt Thun Evolve.

The Thun Evolve has been dedicated to distributive traffic, supplying Preem’s depots and customers in Sweden, Norway and Denmark, since entering service in 2019.

“Maritime transport is an important part of Preem’s operations. We are very pleased to be able to introduce renewable liquefied biogas into our fuel mix. This opportunity supports our high-end sustainability requirements,” says Anna Karin Klinthäll, Manager Trading Operations at Preem.

Gasum noted that it plans to continue to invest in the LNG and LBG supply chain as part of its plans to develop fuel offerings and services to meet the future needs of the maritime segment. “We have more and more supply coming onstream. We are extending our production portfolio as we speak,” Granqvist concluded.