Pacific Basin signs methanol fuel deal with Towngas

Pacific Basin, a leading dry bulk shipping company based in Hong Kong, has entered into a memorandum of understanding (MOU) with The Hong Kong and China Gas Company Limited (Towngas) to secure a reliable supply of green methanol. This strategic partnership aims to help Pacific Basin comply with increasingly stringent international emissions standards. The agreement outlines Towngas’s commitment to provide green methanol that meets essential international certification requirements.

Strategic Move Towards Sustainable Shipping

Martin Fruergaard, the chief executive of Pacific Basin, emphasized the significance of this collaboration, stating it represents a crucial advancement in securing access to large volumes of green fuels necessary for compliance with the FuelEU Maritime and the International Maritime Organization’s Global Fuel Standard. The green methanol will be utilized to power Pacific Basin’s future fleet of dual-fuel vessels, which are designed to operate on traditional marine fuel, sustainable biofuels, or green methanol. Currently, Pacific Basin operates over 260 ships, with nearly 110 owned by the company.

In a notable shift, Pacific Basin made headlines late last year by ordering four methanol dual-fuel ultramaxes from Japan’s Nihon Shipyard, marking its first newbuilding initiative in several years. These vessels are scheduled for delivery between 2028 and 2029. Fruergaard highlighted the flexibility of the new vessels, which will allow them to switch between various fuel types. He also noted that incentives under the IMO’s proposed Global Fuel Standard could enhance the business case for adopting low-emission vessels and near-zero carbon fuels sooner rather than later.

Towngas Expands Green Methanol Production

Earlier this year, Towngas formed a partnership with Singapore’s Global Energy Trading, the first company in Singapore to operate dedicated methanol bunkering tankers, to develop supply solutions throughout Asia. Towngas is also ramping up its green methanol production capacity at its facility in Ordos, Inner Mongolia. This plant converts biomass and municipal waste into fuel using proprietary technology, with annual output expected to rise from 100,000 tonnes to 150,000 tonnes by the end of this year.

Pacific Environment experts weigh in on shipping decarbonization

In addition to its current operations, Towngas has announced plans to establish more methanol production facilities across China, including locations in Inner Mongolia, the Greater Bay Area, and Hainan. The goal is to achieve an annual production capacity of 1 million tonnes of green fuel and chemical supplies to meet the growing demand from the shipping industry. This move by Pacific Basin is part of a larger trend among shipping companies to secure methanol supplies, a shift that includes major container lines as they adapt to evolving environmental regulations.