Mitsubishi Corporation

Press Room

July 2, 2014

Mitsubishi Corporation, GDF SUEZ and NYK Form Partnership in LNG Bunkering Business

Mitsubishi Corporation, GDF SUEZ and Nippon Yusen entered into a framework agreement on May 13, 2014, under which the partners will conduct further studies towards developing the supply of liquefied natural gas (LNG) as fuel for the shipping industry (LNG Bunkering Business). The initiative is being considered within the context of international regulations that seek to reduce the impact on shipping activities on the global environment.
 
As part of this study, the partners agreed on June 30 to work towards setting up sales and vessel holding joint ventures, including LNG bunkering operations at Belgium’s main port, Zeebrugge, which are slated to start operations in 2016 with the supply of LNG fuel to United European Car Carriers (UECC), a Norwegian automobile carrier.
 
The operation at Zeebrugge will make use of a large-scale LNG bunkering vessel with a capacity of 5,100 m³, the first of its kind in the world to go into full-scale operations. While the three companies are seeking to launch and develop this business in the European market, there are notable long-term prospects for further development globally. This assessment comes in light of the vast reserves of natural gas and the ensuing shale gas revolution in the US as well as the projection that Asia will continue to see remarkable economic growth and as such is poised to become a major demand market for shipping fuel.
 
International Maritime Organization (IMO) regulations regarding the emission of noxious substances such as NOx, SOx and PM by large maritime vessels are becoming increasingly stringent. In relation to SOx, for instance, effective 2015, regulations in designated ECAs¹ will require that the concentration of sulfur content not surpass 0.1wt%, one tenth of the volume allowed at present.
 
Notwithstanding, LNG-based fueling for ships carries a much lower emission rate when compared with traditional petroleum based sources. The emission of SOx and PM, for instance, has been proven to be almost zero, while NOx and CO2 are lower by up to 80% and 30%, respectively. LNG is therefore gaining greater currency as the main fuel for shipping in Northern Europe.
 
One of the main concerns regarding the advance of LNG as a fuel source for the shipping industry revolves around the development of supply infrastructure. However, a complete change over from petroleum based infrastructure is estimated to yield some 190 million tons of LNG per year, which is approximately 80% of the 240 million tons per year already being supplied to the market. US energy consulting firm, Cambridge Energy Research Associates, estimates that LNG supplied to the shipping industry will reach some 65 million tons per year in 2030.
 
Combining GDF SUEZ’s experience of over 40 years in the LNG business and NYK’s proven success in LNG transportation with the presence of MC’s LNG portfolio in providing a stable supply of energy to the market, this new venture also provides another opportunity to contribute to the protection of the global environment.
【Structure of Joint Venture】
【Zeebrugge Port】
【Illustration of LNG Bunker Operations at Zeebrugge】
 【Glossary】
・ Shipping Emissions Regulations: As stipulated by the International Maritime Organization (IMO), restrictions placed on SOx emissions will become more stringent in designated ECAs (see definition below) from as early as 2015, with the limit being reduced from 1.0wt%S to 0.1wt%S. Restrictions outside these ECAs will also be tightened, with the limit changing from 3.5wt%S to 0.5wt%S, effective either from 2020 or 2025 (a measure will be adopted in 2018).
・ ECA: Emission Control Area refers to a geographical area where there are stricter controls regarding the extent of noxious emissions from ships; specifically, Northern Europe’s Baltic Sea area, North Sea area, and the North America area (including the Commonwealth of Puerto Rico).
 
GDF SUEZ
1)    Headquarters:            Paris, France
2)    Business Activities:    GDF SUEZ is a global energy player and an expert operator
in the three key sectors of electricity, natural gas and energy services, including gas trading and shipment operations, and an impressive track record in the LNG business.
3)    Representative:           Gérard Mestrallet, Chairman and CEO
4)    Date Established:       July 22, 2008
5)    No. of Employees:       Approx. 147,200 (as of December 2013)
6)    Website:                      http://www.gdfsuez.com/
 
Nippon Yusen Kabushiki Kaisha
1)    Headquarters:            3-2, Marunouchi 2-chome, Chiyoda-ku, Tokyo, Japan
2)    Business Activities:    Global logistics based on international marine transportation
business, cruises, terminal and harbor transport, shipping related services, real estate, and others.
3)    Representative:           Yasumi Kudo, President
4)    Date Established:       September 29, 1885
5)    No. of Employees:       55,661 (consolidated, as of March, 2014)
6)    Website:                      http://www.nyk.com/
 
Mitsubishi Corporation
1)    Headquarters:            3-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo, Japan
2)    Business Activities:    MC has seven business groups which develop business
in diverse fields, namely Global Environment and Infrastructure; Industrial Finance, Logistics and Development; Energy; Metals; Machinery; Chemicals; and Living Essentials. In addition to these business groups, MC has recently established its Business Service Group. 
3)    Representative:           Ken Kobayashi, President and CEO
4)    Date Established:       July 1, 1950
5)    No. of Employees:       68,383 (consolidated, as of March 2014)
6)    Website:                      http://www.mitsubishicorp.com

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