BHP contracts EPS for LNG-fuelled shipping

BHP shipping operations at Port Hedland. Image: BHP

BHP has awarded the world’s first LNG-fuelled Newcastlemax bulk carrier tender for the company’s chartered vessels along the Western Australia to China route.

The charter contract goes to Eastern Pacific Shipping (EPS), which will carry iron ore from Western Australia for a period of five years starting 2022.

This arrangement will ultimately reduce greenhouse gas emissions by more than 30 per cent per voyage.

As one of the largest bulk charterers in the world, BHP recognised the role it must play in driving actionable reductions in greenhouse emissions across the maritime supply chain, according to BHP chief commercial officer Vandita Pant.

The vessels will virtually eliminate sulphur oxide emissions and significantly reduce carbon dioxide and nitrogen oxide emissions.

“We expect the introduction of LNG-fuelled vessels will result in more than 30 per cent lower carbon dioxide emissions on a per voyage basis compared to conventional fuel along the Western Australia to China route,” Pant said.

“The tender marks a progressive shift for BHP and the broader mining and shipping industry and is a significant step toward lowering greenhouse gas emissions in the 1.5 billion tonne iron ore seaborne market.

BHP released the LNG-fuelled bulk carrier tender last July before completing a rigorous due-diligence process to identify short list tenderers.

Safety, technical and economic factors and a clear demonstration to make a sustainable positive change for the industry were among the stringent criteria in selected EPS.

Pant said EPS offered a competitive bid and efficient vessel design with superior fuel efficiency and greenhouse gas emissions reductions, as well as an alignment of values with BHP.

EPS chief executive Cyril Ducau said that the company was thrilled to work with BHP on this project due to the companies’ aligned values to achieve greater sustainability agendas.

“BHP’s commitment to making a positive change for the industry resonated with our decarbonisation mission and our culture of environmental protection,” Ducau said.

“When these vessels deliver in 2022 they will be the cleanest and most efficient in the entire dry bulk shipping fleet and will be International Maritime Organisation 2030 compliant, eight years ahead of schedule.”

The LNG bunkering supply contract is expected to be awarded next month.

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