BHP awards tender for LNG-fueled bulk iron ore carriers

BHP Group has awarded a tender to charter five bulk iron ore carriers powered by LNG, aiming to cut greenhouse gas emissions on voyages to biggest customer China by more than 30%.

The contract for five LNG-fuelled Newcastlemax bulk carriers to carry ore between Western Australia and China was awarded to Singapore-based Eastern Pacific Shipping, and will run for five years from 2022, the global miner said.

The shipping industry has been under pressure to bring down levels of carbon emissions, having this year also introduced new rules on the level of sulphur in marine fuels.

The BHP tender offered an incentive to move to LNG from highly polluting bunker fuel.

BHP Chief Commercial Officer Vandita Pant said the LNG-fuelled vessels would virtually eliminate sulfur oxide emissions and significantly reduce carbon dioxide and nitrogen oxide emissions.

"As one of the largest dry bulk charterers in the world BHP recognises the role we play in working with our suppliers and customers to drive actionable reductions in GHG emissions across the maritime supply chain," Pant said.

"We expect the introduction of LNG-fuelled vessels will result in more than 30% lower CO2-e emissions on a per voyage basis compared to conventional fuel along the Western Australia to China route."

Reporting by Melanie Burton; editing by Richard Pullin