LIQUEFIED natural gas development company EPIK, responsible for the NSW government’s Newcastle GasDock LNG import terminal, has announced it plans to include LNG bunkering services.

The Newcastle GasDock project is a proposed LNG import terminal at Port of Newcastle, providing Australia’s east coast with a low-cost infrastructure solution for the flexible, secure, and competitive supply of natural gas on a long-term basis.

 “The addition of LNG bunkering is a logical extension of the Newcastle GasDock project and will allow our customers to take advantage of LNG’s demonstrated environmental benefits, helping to reduce carbon emissions globally and dramatically reducing marine emissions locally,” said EPIK managing director, Jee Yoon.

“Given the Port of Newcastle’s considerable industrial marine traffic and proximity to Sydney, our project provides an ideal platform to add LNG bunkering operations.”

EPIK’s Newcastle GasDock project provides a foundation for an LNG bunkering business on Australia’s east coast, requiring limited additional infrastructure, and would be a first for the region.

Port of Newcastle, which welcomes more than 2000 ship visits each year, and other nearby ports including Sydney, are said to represent high-potential LNG bunker fuel markets, with steady and significant marine traffic.

The cruise industry in particular has distinguished itself as a major early adopter of LNG as a marine fuel and EPIK expects that the Sydney Harbour cruise sector, with over 300 annual cruise ship port calls, could require more than a quarter of a million tonnes of LNG annually over the coming years.

Similarly, bulk carriers, which make up a significant portion of Port of Newcastle marine traffic, could generate considerable new demand for LNG bunker fuel in the region over the coming years.

The introduction of IMO 2020 regulations limiting sulphur content down from 3.5% m/m (mass by mass) to less than 0.5% m/m, among other factors, is driving more rapid adoption of cleaner marine fuel systems. Further, certain designated Emission Control Areas require the sulphur content to be below 0.1% m/m, making it harder and more costly for traditional low-sulphur marine fuel to comply.

While Australian coastal waters are not currently classified as an ECA, some analysts anticipate a future ECA designation, which will require many shippers to invest in cleaner fueling systems in order to comply.

The Newcastle GasDock project would provide the necessary infrastructure to provide shippers with competitive LNG fuel.