The Ministry of Land, Infrastructure and Transport (MLIT) will build Japan’s first “LNG bunkering” hubs inside Tokyo Bay and Ise-Mikawa Bay to supply fuel to LNG-powered vessels. It will partially subsidize firms in Kanagawa Prefecture and other private enterprises that will undertake the two projects. Through open bidding, it has selected two LNG bunkering projects. One is “Ship-To-Ship LNG Bunkering in Tokyo Bay,” which is undertaken by Sumitomo Corporation, Uyeno Transtech, and Yokohama-Kawasaki International Port Corporation. The other one is the “Ise-Mikawa Bay LNG Bunkering Project,” which is joined by Chubu Electric Power, Nippon Yusen Kabushiki Kaisha (NYK Line), Kawasaki Kisen Kaisha (“K” Line), and Toyota Tsusho Corporation.
Under the Tokyo Bay project, an “LNG bunkering” ship will be built to handle the ship-to-ship supply of LNG to LNG-powered ships berthed at the port. The Ise project will include the retrofitting of Chubu Electric’s Kawagoe thermal power plant, in addition to the construction of an LNG bunkering ship. The government will subsidize up to a third of the cost of each of the two projects.
The two projects are aimed at preparing for global environmental regulations, which will be strengthened from 2020. The MLIT hopes to increase the presence of Japan’s key ports by building LNG bunkering hubs ahead of other Asian countries.
The construction of a hub to supply LNG to LNG-fueled ships is fully underway at the Port of Yokohama, which is one of the largest cruise ship and also trade ports in eastern Japan. The coast along the Tokyo Bay hosts the largest LNG base in Japan, which means LNG infrastructure is already in place. With LNG-fueled cruise ships and container ships being built across the world, preparations are well underway to establish the Port of Yokohama as an LNG hub that can edge out other rival ports in China and South Korea.
Japan is the world’s largest LNG importer, as it handles a third of LNG transactions across the globe. According to the Yokohama Customs, Kawasaki, Yokohama, Chiba, and Kisarazu in Tokyo Bay handle about 42% of Japan-bound LNG shipments combined.
Tokyo Gas, Tokyo Electric Power Company Holdings, and other firms have established LNG bases inside these ports, importing the fuel as an ingredient for town gas and power generation. Of them, Tokyo Gas’ Sodegaura LNG Terminal is equipped with piers for coastal LNG tankers to transport the fuel to local terminals.
The Port of Yokohama serves as a gateway for the Pacific route linking the U.S. and Asia and accommodates many cruise ships and container ships calling there. The LNG bunkering project envisages transporting LNG from the Sodegaura LNG Terminal across Tokyo bay to supply fuel to LNG-fueled ships berthed in Yokohama. “Of [the four ports] in the Tokyo Bay, potential demand for LNG is strong at the Port of Yokohama,” said a person from the Port and Harbor Bureau of the Yokohama municipal government. As the construction of an LNG bunkering ship will be partially financed by the central government, he hopes to “realize the LNG bunkering project as soon as possible.”
From 2020, global sulfur oxide emission controls will be strengthened in all parts of oceans. It is also predicted that LNG will account for about a quarter of ship fuel by 2030. Once the use of LNG as a ship fuel spreads across the world, the Port of Yokohama is expected to increase its geographical edge as a base for the supply of LNG. But Japan fell behind Europe and the U.S. in the construction of LNG supply infrastructure. China and South Korea are also moving to establish themselves as LNG supply bases.
Yokohama-Kawasaki International Port Corporation, which is undertaking the project to build an LNG supply base at the Port of Yokohama, joins two international organizations that promote the use of LNG as a ship fuel and also participate in an international rule-making initiative on the supply of the fuel. “We look to turn the Port of Yokohama into a LNG supply hub in addition to being a trade port and a port of call for cruise ships for further growth,” said a person with Yokohama port authority.