Singapore has become a shipping emissions trend-setter and its new port authority leader intends to maintain momentum in this area while enlarging the City State’s maritime presence
When Quah Ley Hoon took over as chief executive of Singapore’s Maritime and Port Authority (MPA) in January 2019, even she could not have foreseen the issues that would come to dominate her four years in charge.
The purpose of her tenure was to drive forward the MPA’s vision as a leading maritime agency supporting Singapore’s global maritime aspirations. This included, under her stewardship, MPA’s completion of Phase 1 of land reclamation for the Tuas Port project in 2021.
But it will be for her strategic reaction to the Covid pandemic that she is largely remembered. At the inauguration of her successor, the MPA’s statement read, “Ms Quah initiated the Singapore Shipping Tripartite Alliance Resilience Fund in November 2020, the first global tripartite initiative to work with stakeholders in seafaring nations on sustainable solutions for safe crew changes.
“To minimise disruption to the maritime industry, she was instrumental in leading efforts such as Sea-Air-Vaccination Exercise and Sea Crew Vaccination Initiative to safeguard the health of both local maritime personnel as well as crew members on board ships calling at Singapore.”
Singapore’s Ministry of Transport has officially noted its appreciation of Ms Quah’s contributions as chief executive of the MPA.
Her successor is Teo Eng Dih, a former deputy secretary of the Ministry of Defence, where he oversaw the expansion of defence co-operation with international partners and strengthened collaborations at the ASEAN Defence Ministers Meeting platform.
International collaboration and local defence against the common enemy of carbon emissions was one the themes of his statement* when taking up his new position. Mr Teo noted, “I will not be surprised if the international organisations overseeing international transport emissions raise their level of commitment, consistent with what the science requires to address climate change, as the costs and impact for not doing so will be far higher. Therefore, from a lifecycle perspective to avoid stranded assets, the port terminals, harbour craft sector and the international shipping community will need to be clear-eyed about future investments, work on decarbonising the existing stock and upskill our workforce to seize opportunities from this transition.”
That transition will have a significant impact on shipping companies and operations based in Singapore, the activities of which in the local and global supply chain will need to adopt to new demands from clients.
In the tanker sector, Singapore is home to several significant owners. The top 10 is led by Hafnia, which was created by the merger of Hafnia Tankers and BW Tankers. A key moment in its growth was in 2021, when it entered into a share purchase agreement to acquire all outstanding shares in Oaktree Capital Management-funded Chemical Tankers Inc (CTI). In doing so, it took control of CTI’s fleet of 32 modern, fuel-efficient IMO II product and chemical tankers.
Hafnia’s growth and prominence in global shipping did not go unnoticed and it was nominated and ultimately awarded the 2022 Riviera Maritime Media Tanker Operator of the Year Award. The award was collected by vice president technical Jørgen Thuesen, who was a panel speaker during the two-day Tanker Shipping & Trade conference held in Athens, Greece.
In early 2023, Oaktree sold its shares and Oaktree’s managing director of its GFI Energy Group, Guillaume Philippe Gerry Bayol, resigned from Hafnia’s board.
The second-largest tanker owner located in Singapore is AET, the tanker arm of Malaysia’s top shipping line MISC. In 2022, it was party to a memorandum of understanding with Thailand’s largest state-owned, multinational energy company, PTT, for the development and construction of two ammonia-fuelled Aframaxes tankers – some of the first of their kind.
Another significant owner in the region is MOL Chemical Tankers PTE. In 2022, it teamed up with Trafigura’s TFG Marine bunker supply arm in a deal to supply biodiesel to the fleet. According to data from the MPA (which controls bunkering activity in the port), TFG Marine was the third-argest supplier of bunkers in the city-state, behind Petrochina International and top-spot holder, Equatorial Marine Fuel Management Services.
The fourth-largest tanker owner in Singapore, Hong Lam Marine, is also in 14th place on the list of companies that supplied the most bunkers in Singapore in 2022. Hong Lam Marine also has ammonia ambitions and in 2022, entered into a project to be the operator of an ammonia bunker vessel being developed with PaxOcean Engineering and classification society Bureau Veritas (BV).
PaxOcean will focus on developing designs for ammonia-fuelled and ammonia bunkering vessels. Hong Lam Marine’s role is to provide input specific to operational data, and to support and validate the suitability of the vessel design for commercial operations.
Ammonia as a marine fuel is also on the mind of another local bunker supplier, Fratelli Cosulich Bunkers (Singapore) Pte. It is working with class society RINA and designer SeaTech Solutions on a joint development project to develop an ammonia bunker vessel. Within the agreement, SeaTech will focus on the NH3 ship concept development and design, while RINA will verify compliance with the applicable rules, particularly those related to handling ammonia. Fratelli Cosulich Bunkers will provide the operational data to support and validate the suitability of the ship design for commercial operations.
Fratelli Cosulich Group head of business development Guido Cardullo said, “Ammonia will play a fundamental role in reducing shipping emissions and we believe it is our responsibility to make shipping increasingly respectful of the environment, in the interest of future generations.”
Fratelli Cosulich is one of 21 partners in the DNV-led consortium undertaking the GMCD-commissioned ammonia bunkering and safety study, which will help establish the basis of a ‘regulatory sandbox’ for trials at two ammonia bunkering sites in Singapore.
Singapore’s focus on ammonia is no accident: the MPA is a lead partner in the Castor Initiative to develop and promote the use of ammonia as a marine fuel. The Castor Initiative includes MISC Berhad, Lloyd’s Register, Samsung Heavy Industries, MAN Energy Solutions, Yara Clean Ammonia, Jurong Port and most recently, TotalEnergies.
MPA assistant chief executive (industry and transformation) Kenneth Lim said at the announcement of TotalEnergies joining the Castor Initiative, “MPA welcomes TotalEnergies’ participation to the Castor Initiative. The decarbonisation of the fleet and development of a green ammonia supply chain and other hydrogen carriers to meet IMO targets will require the commitment of diverse stakeholders across the entire value chain. As the world’s top bunkering hub, Singapore will work closely with the industry to bring in a green marine fuel supply chain, through consortiums such as the Castor Initiative and the green and digital shipping corridors, to enable the energy transition.”
The introduction of low-carbon emissions craft in the region is part of MPA’s net-zero emissions commitment for its port infrastructure, logistics and domestic harbour craft sector. Another example is JMS Sunshine, a hybrid tug designed by Sembcorp Marine subsidiary LMG Marin and classed by ABS to run purely on LNG, with lithium-ion batteries for emissions-free operations during idling and low-speed transits.
Sembcorp Marine plans to build a fleet of these LNG-hybrid tugs to progressively replace the city-state’s existing diesel-powered fleet. JMS, a licensed operator of the Maritime and Port Authority of Singapore, will operate the vessels.
Singapore is also home to a slew of globally recognised tanker technical managers, with the top 10 by number being led by EagleStar, another company in the MISC stable. It was at a gala dinner in Athens on 9 November 2022 that AET’s new VLCC, Eagle Valence, was awarded the Tanker Shipping & Trade Tanker of the Year Award.
300,000-dwt Eagle Valence is one of the company’s first two dual-fuel VLCCs which can run on LNG, powered by a WinGD 7x82 dual-fuel engine and is destined for long-term charter to TotalEnergies.
Big issues ahead
Change is the watchword in Singapore and there are some big challenges lying ahead for the pure shipmanagement companies in the region. This is especially true following the news that OSM Maritime Group and Thome Group, which have bases in the region, have agreed to a merger, with the combined company to be called OSM Thome. Between them, the two companies manage 1,000 ships across multiple segments, including tankers, bulkers, container ships, car carriers, cruise ships and offshore vessels. They have 450 ships under full technical management, and crew management oversight on 550 vessels.
If approved by competition authorities, the merger will make the new company one of the largest in the shipmanagement sector worldwide, not just in Singapore.
Thome Group chief executive Olav Nortun said, "It is the people that enable us to deliver top quality and sustainable solutions to our customers. We operate across all the world’s oceans, and the efforts of our 30,000 seafarers are key for the position we have gained within international shipping.”
Mr Nortun will take up the position of chief operating officer for the consolidated shipmanagement activities. OSM founder Bjørn Tore Larsen will become chairman of the new board of directors and Thome’s Claes Eek Thorstensen will be vice chairman.
*This is excerpted from a speech by Maritime and Port Authority chief executive Teo Eng Dih at the Singapore Registry of Ships Forum, 17 November 2022.
© 2023 Riviera Maritime Media Ltd.