It signed a preliminary deal, known as the heads of agreement (HOA), with bunkering firm GAC Bunker Fuels for the supply of LNG marine fuel on a delivered ex-ship (DES) basis.
The financial details of the deal were not disclosed.
The super-chilled fuel is to supply GAC’s customers in the Galveston Bay Port complex, including the ports of Houston, Galveston and Texas City, as well as the Galveston Offshore Lightering Area, on a long-term basis, Pilot LNG said.
“This agreement with Pilot will allow us to grow our portfolio of alternative fuels, with LNG as the cleanest and most cost-effective way for shippers to meet compliance,” said GAC Bunker Fuels’ global director Nicholas Browne.
The shipping industry has been under pressure to reduce carbon emissions, and earlier this year introduced new rules to cut the sulphur content in marine fuels, also known as bunker fuels. This in turn is prompting demand from tanker operators and cruise liners for LNG as a bunker fuel.
Pilot LNG added it has filed regulatory applications with the U.S. Army Corps of Engineers (USACE) and other relevant regulatory agencies, ahead of a final investment decision expected next year.
The Galveston LNG Bunker Port on Pelican Island, located off Galveston Bay, is expected to start operations in late 2024 and is expected to fuel ships entering or leaving the busy Houston Ship Channel.