Japan mulls LNG bunker hub at Yokohama

Singapore

JAPAN, the world's largest importer of liquefied natural gas (LNG), has launched a study on the feasibility of setting up an LNG bunkering hub in Yokohama, one of its key container-handling ports.

The Ministry of Land, Infrastructure, Transport and Tourism (MLIT), which is undertaking the study, said it hopes to develop a bunkering hub that will "harmonise" with other environmentally advanced ports in Asia.

News of the study comes about a month after Prime Minister Shinzo Abe's administration unveiled its strategy to develop an LNG market; the foray into LNG bunkering is part of this plan.

MLIT has since set up a steering committee to come up with a facility development plan by year's end.

Asked whether a start-up date has been set for bunkering in Yokohama, a spokesman said the study will look into this, and that the ministry would consult the International Maritime Organization (IMO) for guidelines on emission regulations.

The IMO's plan to impose a global sulphur cap by 2020 at the earliest has triggered interest among the world's leading ports in LNG bunkering.

LNG is a cleaner-burning fossil fuel, the use of which significantly cuts down greenhouse gases such as sulphur dioxide, unlike conventional heavy fuel oils now being primarily used for bunkering.

Japan's leading shipping company, NYK Line, has linked up with two European companies to own and soon operate an LNG bunkering vessel in the port of Zeebrugge in Belgium.

The Business Times reported this week that the shipping company could be eyeing a third LNG bunkering licence in Singapore.

NYK Line has also owned and operated an LNG-fuelled tug boat in Yokohama since 2015. The tug has been using LNG bunker supplied by Tokyo Gas.

NYK Line and Tokyo Gas have been roped into the LNG bunkering steering committee as members; the committee also comprises representatives from MLIT, Yokohama Kawasaki International Port Co, Yokohama City Office, the Agency for Natural Resources & Energy and the Japan Coast Guard.

Japan has ready installed tanks for the super-chilled fuel at its major ports - tanks which can also be used by bunkering vessels. Besides Yokohama, Japan has four other international container hubs, namely, Kobe, Osaka, Tokyo and Kawasaki. MLIT says Yokohama welcomed 35,988 vessel arrivals last year.

The country will have to cultivate alternative uses of LNG, aside from bunkering, given the projected excess from contracted import volumes between next year and 2021. This data, from a leaked report picked up by news wires, projects that Japan's demand for LNG will fall by between 30 and 62 million tonnes by 2030; the fall is attributable to Mr Abe's plan to restart nuclear power plants, which will defuse Japan's reliance on LNG.