BHP expects to receive 3 more LNG-fueled bulk carriers

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BHP expects to receive 3 more LNG-fueled bulk carriers

Visitors to the BHP booth speak with representatives during the PDAC convention in Toronto.

SINGAPORE Reuters -- BHP Group expects to receive three more bulk carriers powered by liquefied natural gas LNG in the next six to nine months, part of the company's plans to reduce emissions from shipping, a senior executive said.

BHP, which received its first two LNG-fueled vessels earlier this year, has locked in some term supplies of LNG to protect the company from volatile prices and is studying the potential for biofuels, Fergus Eley, BHP's head of Maritime Enterprise, told Reuters on the sidelines of the Singapore International Bunkering Conference and Exhibition SIBCON 2022.

The world's largest miner and shipper of dry bulk commodities is looking at net zero greenhouse gas emissions from its operations by 2050 and started using LNG to fuel ships carrying products from Australia to China this year.

Eley said that BHP will receive delivery of the three additional carriers from Eastern Pacific Shipping by mid- 2023.

He said that LNG will be a key transition fuel choice for BHP, despite the price volatility in the market over the past two years.

Asian LNG spot prices are at their highest since 2010, as Europe has been boosting LNG imports to replace Russian gas since the outbreak of the conflict in Ukraine.

Eley said that the volatility we're seeing at the moment is unavoidable. He said that the company has locked in some term supplies in order to cushion the impact of spot price volatility and BHP takes a long-term view on the lower-emitting fuel.

BHP is looking at opportunities for ships to take biofuel for bunkering in Singapore, especially for trips to the east coast of Australia and Europe.

He said we have conducted one or two biofuel trials in the last 12 months, and we are now working on a larger contract.

The industry is facing a major challenge to adopt biofuel for bunkering in Asia, where it is not readily available in Europe.

Eley said we can help create that demand by forming contracts where some of our vessels go through to Europe, bunker here in Singapore with biofuels. BHP hopes to reduce emissions by 20% for long-haul voyages using biofuel.