Malaysia’s state-owned Petroliam Nasional Berhad, aka Petronas, is seeking to become Southeast Asia’s premiere liquefied natural gas (LNG) bunkering hub, with subsidiary Petronas LNG Sdn Bhd signing a time charter party with MISC Bhd and UK-based Avenir LNG Ltd to charter a 7,500 cubic meter bunker vessel.

MISC is a 62.67% owned subsidiary of Petronas and serves as its shipping arm while Avenir LNG is a joint venture (JV) between Stolt-Nielsen Ltd, Golar LNG and Höegh LNG. The JV has six small LNG carriers under construction and also holds an 80% interest in an import terminal under construction in Italy.

“The collaboration positions Petronas among the first LNG bunkering service providers in the Southeast  Asia region, moving Malaysia closer toward becoming an LNG bunkering hub,” Petronas said. “The LNG bunker vessel is capable of providing bunkering services to LNG fueled vessels across Malaysia, and also transporting smaller scale LNG cargoes across the region.”

Petronas Vice president Ahmad Adly Alias, who handles LNG marketing and trading, said his company is always on the lookout to adopt technologies through smart partnerships and promote LNG as a fuel of choice for the marine industry.

“Petronas is also collaborating with various ministries, authorities and fellow industry players to codevelop the policies, guidelines and procedures for safe and effective bunkering operations in embracing International Maritime Organization (IMO) 2020 regulations,” he said.

Heavy fuel oil, derived as a residue from crude oil distillation, has been the main type of bunker fuel for ships for years, particularly because of its low cost. The IMO 2020 regulation, which takes effect Jan. 1, will require ships operating in international waters to reduce sulfur emissions by more than 80%. Around 80,000 vessels worldwide are reportedly considering how to comply with IMO’s new standards.

LNG bunkering is well suited for Southeast Asian countries like Malaysia, and particularly archipelago countries like the Philippines and Indonesia, with hundreds of stranded islands that have to rely on burning coal and oil for power generation.

Petronas has set up the necessary infrastructure for domestic LNG bunkering services at Pengerang, Johor, Sungai Udang and Melaka (Malacca), the company said. It is also actively working toward establishing an LNG bunkering global network through partnerships with port operators and international industry players.

Malaysia, which may face competition in its LNG bunkering plans from other countries, including Japan, recently started subsidizing projects in a rush to build vessels that make ship-to-ship supply possible.

Streamlining LNG bunkering posts is becoming increasingly important in Japan as Singapore, South Korea and China are also beefing up such facilities, Jera’s LNG bunkering unit general manager Akiki Tanba said in a recent Japan Times interview.

Jera, a joint venture between Tokyo Electric Power Co. and Chubu Electric Power Co. is a member of a consortium that’s building Japan’s first LNG bunkering ship.