Leading the WAy: Western Australia is the key to driving LNG as a marine fuel
Walter Purio A , Matthew Bowen B C , Adel van der Walt B and Sarah Panizza A D B DA LNG Marine Fuel Institute, c/o 225 St Georges Terrace, Perth, WA 6000, Australia.
B Jackson McDonald Lawyers, 225 St Georges Terrace, Perth, WA 6000, Australia.
C Corresponding author. Email: mbowen@jacmac.com.au
D At the time of writing.
The APPEA Journal 58(2) 589-592 https://doi.org/10.1071/AJ17136
Accepted: 22 March 2018 Published: 28 May 2018
Abstract
Uniquely positioned globally, logistically and financially, resource rich, Western Australia is poised to lead the establishment of liquefied natural gas (LNG) as a marine fuel in the Asia Pacific region.
Maritime trade is vital to the global economy, but is a major source of atmospheric pollution. This paper considers how tightening restrictions on marine exhaust emissions will affect vessel owners and the shipping trade, and why LNG offers a clean, safe and economically viable option to meet the new restrictions.
Western Australia’s bulk iron ore export trade to Asia offers sufficient critical mass to underpin the creation of this new LNG bunkering industry. A design has already been completed for a new bulk ore carrier capable of running on both conventional heavy fuel oil and LNG and meeting the new emissions requirements.
The LNG Marine Fuel Institute has analysed the demand and supply side business cases required to get this industry started. On the demand side, its modelling concludes that LNG-powered vessels can be economically viable if bunkering LNG is priced in the range of US$7 to $10/mmBtu. On the supply side, this price is achievable from an initial commercial scale 0.5 mtpa LNG bunkering facility if the natural gas feedstock can be priced in the range of AU$5 to $7/GJ (excluding pipeline charges). Such a plant would require ~75 TJ/d of natural gas feedstock. Western Australia’s domestic gas market is well positioned to meet this demand in terms of both price and volume.
The benefits of this new industry would extend to Australian bulk exporters, gas suppliers, ship owners and operators, infrastructure owners and Australian governments.
Keywords: China ECAs, CO2, dual-fuel (HFO/LNG) vessels, ECAs, gas reserves, global shipping industry, Green Corridor, health and pollution, heavy fuel oil, LNG as a marine fuel, LNG bunkering, LNG Marine Fuel Institute; maritime exhaust emissions, MARPOL sulphur emissions limits, new industry, NOx, opportunity for WA, SOx, WA gas market, WA iron ore.
Captain Walter P. Purio is the managing director of P and H Marine Australasia Pty Ltd and currently assists oil and gas companies in Australia to develop their strategies to provide LNG as a marine fuel to the Australasian region. He acts as CEO of the LNG Marine Fuel Institute and serves as a Marine Advisor to Woodside Energy Ltd and Karara Mining Ltd, providing marine expertise, insight and advice specific to government, resource and oil and gas company marine issues as they explore the potential to develop a sustainable regional and global footprint and establish LNG as a marine fuel industry in the Southern Hemisphere and Asia Pacific region. Captain Purio is a seasoned maritime industry executive who has worked across several marine disciplines including commercial shipping, marine finance, marine compliance, naval operations, offshoring, mining and support to the oil and gas industry and holds a BSc degree from the USA Merchant Marine Academy and MBA’s from the University of Chicago and the Katholieke Universitat Leuven, Belgium. |
Matthew Bowen is a Partner in Jackson McDonald’s Energy and Regulation Team. He practices in energy law, infrastructure access, competition and trade practices law and statutory drafting and interpretation. Matthew is a member of the Australian Institute of Energy, Association of International Petroleum Negotiators, Honorary Member of the UWA Faculty of Law and the Chamber of Commerce and Industry’s Energy and Resources Forum. He recently authored the Western Australia Independent Power Association’s ‘Energy Reform White Paper’, released in November 2017. Since 1994, Matthew has helped the Western Australian Government in a wide range of legislative reforms in the energy industry, including developing several statutory access regimes for gas and electricity infrastructure, the gas and electricity licensing regimes, the introduction of full retail contestability in gas, the 2004 and 2006 electricity industry restructure and other projects. He advises clients on regulatory matters, energy contracting and statutory compliance. He has helped negotiate and implement large scale and long-term contracts, including project implementation under State Agreements and State Development Agreements. Matthew advises private and public sector clients regarding third party access and competition law and policy generally. |
Adel van der Walt is an experienced commercial lawyer whose practice covers a wide range of matters in connection with minerals, energy and resources, corporate law and broader commercial transactions. Adel advises clients on asset acquisitions and disposals, both in Australia and overseas, including corporate and project structuring, due diligence and associated funding, corporate and regulatory matters. She has advised on and has led several large transactions involving the preparation and negotiation of transaction and project documents for mining, oil and gas and renewable energy projects. Adel assists clients with contract preparation, negotiation and interpretation and regularly advises clients on joint venture and equity participation arrangements, including farm-in agreements, shareholders agreements and operating and management agreements. Her experience covers a wide range of project and commercial documentation, including services, sales and supply, offtake, tolling, distribution and utilities arrangements in connection with minerals and energy assets and renewable power projects. Adel also advises clients on energy contracting and statutory compliance. |
At the time of writing, Sarah Panizza was part of the Business Development and Marketing Team at Jackson McDonald and was seconded part time to the LNG Marine Fuel Institute where she acted as External Affairs and Advocacy Advisor. Sarah assisted the LNG Marine Fuel Institute in its mission to provide marine expertise, insight and advice to government, resource and oil and gas companies as they explore the potential to develop LNG as a marine fuel industry in the Southern Hemisphere. Prior to joining Jackson McDonald and the LNG Marine Fuel Institute, Sarah served as media and communications adviser to an Australian Federal MP, overseeing a range of activities from communication and campaign strategies to parliamentary and committee research. Sarah earned her BSc (Agr)(Hons) and BCom from the University of Western Australia, Perth. |
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