Sumitomo & Keppel Offshore Enter MOU to Explore Ammonia Fuel in Singapore

Source: www.gulfoilandgas.com 12/27/2021, Location: Asia

Sumitomo Corporation and Keppel FELS, a wholly-owned subsidiary of Keppel Offshore & Marine Ltd have signed a Memorandum of Understanding (hereinafter "MOU") to explore the feasibility and implementation of various ammonia fuel applications in Singapore.

Ammonia, a compound of hydrogen and nitrogen, emits no carbon dioxide when combusted, and therefore has long been considered as a next-generation fuel for thermal power generation and large ocean-going vessels. Ammonia is also expected to play a role as an energy carrier for hydrogen since it is easier to liquefy and transport than hydrogen.

Through this MOU, Sumitomo Corporation and Keppel O&M will work on the implementation of ammonia bunkering in Singapore, with the aim to commence commercial operations in the mid-2020s. Sumitomo Corporation and Keppel O&M will accelerate the development of an ammonia bunkering vessel in coordination with the relevant authorities, expediting the implementation of ammonia bunkering in Singapore and contributing to the realization of zero carbon shipping. Sumitomo Corporation and Keppel O&M will also work to expand the ammonia value chain in Singapore.

As Singapore aspires to reduce energy consumption, improve energy efficiency and transition its power generation portfolio towards net-zero emissions, limited land space remains one of the critical challenges in the implementation of large-scale green energy. One of the solutions that Sumitomo Corporation and Keppel O&M will be exploring is the use of green energy such as ammonia for offshore power generation in Singapore.

Hajime Mori, Energy Innovation Initiative Director of Sumitomo Corporation, said, “We are delighted to cooperate not only on Ammonia bunkering but Ammonia business opportunities in Singapore with Keppel O&M. In line with our basic environment policy that aims to make the Sumitomo Corporation Group carbon neutral in 2050, we would like to pursue this business with Keppel O&M group to achieve our common goal.”

Aiming to create a next-generation energy business that will contribute to carbon-neutral society, by establishing sustainable energy cycle and achieving decarbonization and recycling energy system, Sumitomo Corporation has strategically invested management resources such as internal expertise and network to the Energy Innovation Initiative (EII) since this April. Specifically, hydrogen, ammonia, storage batteries, forest resource and woodchip and biomass businesses and other next-generation energy-related businesses that various business units have been involved in, is all consolidated into the EII. Furthermore, by employing a multilateral approach using diverse internal and external expertise and network, EII dedicates oneself to the business expansion with the above fields as its focus, overlooking the entire value chain. Through the creation of next-generation energy business with EII, Sumitomo Corporation is aiming to contribute to carbon-neutral society.

Tan Leong Peng, Managing Director (New Builds), Keppel O&M, said, “We are pleased to extend our collaboration with Sumitomo Corporation which will deepen Keppel O&M’s decarbonisation efforts. Keppel O&M is working with its partners and leveraging its engineering expertise, bunkering experience, and new build capabilities to develop the ammonia bunkering ecosystem for the marine industry. We are also applying our research in ammonia to advance adjacent solutions in green energy generation. This is in line with Keppel’s Vision 2030, which includes seizing opportunities in new energy.”

Keppel O&M is committed to providing a range of solutions to support the decarbonisation of the marine industry as well as providing cleaner offshore energy sources. With in-depth engineering expertise and an established track record in the gas value chain, Keppel O&M offers proven and customised solutions in LNG, which is an important part of the clean energy transition and increasingly adopted as a marine fuel. It is leveraging its experience in LNG to drive research and develop solutions to enable the adoption of hydrogen and ammonia as a marine fuel and energy source. Keppel O&M is also developing a comprehensive electric vessel supply chain in Singapore, which will feature marinized energy storage systems to power harbour craft.

The above development is not expected to have a material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year.


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