BHP to Use LNG-Fuelled Ships to Transport Iron Ore

Anglo-Australian multinational BHP will use LNG-powered vessels to transport iron ore from Western Australia to China, it said on September 4.

The company has awarded Eastern Pacific Shipping (EPS) a five-year charter contract for five LNG-fuelled Newcastlemax bulk carriers to carry iron ore from 2022. An LNG bunkering supply contract is expected to be awarded next month, it said.

BHP's chief commercial officer, Vandita Pant, said using the LNG-fuelled vessels would virtually eliminate SOx emissions and significantly reduce CO₂ and NOx 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. "The tender marks a progressive shift for BHP and the broader mining and shipping industry and is a significant step toward lowering GHG emissions in the 1.5bn tonne iron ore seaborne market.”

Pant said the LNG-fuelled vessels would produce 30% less CO₂ emissions per voyage versus conventional vessels along the Western Australia to China route. BHP opened the LNG-fuelled bulk carrier tender in July last year.

"The LNG bunkering time charter contract, with a total cost of ownership less than a conventionally-fuelled Newcastlemax, will enable BHP to manage the fuel supply risk, build LNG operations capability internally and capture opex benefits through optimisation of voyage operations and fuel utilisation," she said.