First U.S. Gulf Coast LNG Bunkering Hub Gets Permits

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--With shippers looking to lower emissions, Galveston LNG Bunker Port (GLBP) (Houston, Texas) said it was permitted to build a fueling facility for vessels off the greater Houston-Galveston region.

"Upon completion, the LNG [liquefied natural gas] facility will be the first dedicated marine bunker port on the U.S. Gulf Coast serving the growing clean-energy marine fuels market," the company said on Monday.

GLBP said it secured the permits necessary for construction from the U.S. Army Corps of Engineers and U.S. Coast Guard.

The International Maritime Organization (IMO), a U.N.-backed agency overseeing the global shipping industry, in April drafted legislation that would outline new fuel standards and global-pricing mechanisms for emissions. Set for implementation in 2027, the standards would apply to vessels of more than 5,000 gross tonnage, vessels that are responsible for more than 80% of the global shipping emissions.

The agency already has standards that mandate reductions in sulfur-dioxide emissions and other pollutants. To meet those standards, shippers have installed onboard devices called scrubbers that clean the ship's exhaust or otherwise looked to fuels other than the sulfur-rich heavy fuel oil (HFO) more commonly used today.

LNG is cooled considerably, lowering the overall volume. And because it's derived primarily from methane, which is made up of carbon and hydrogen atoms, it has no significant sulfur content, satisfying some of the IMO's mandates.

From the Texas City Ship Channel, the facility, a joint venture between Pilot LNG (Houston) and Seapath Group (New York, New York), will use fuel barges to supply LNG to ships in the region.

"We are in the very advantageous position of being the only permitted LNG bunker project in the region," Shaun Davison, the chief development officer of Pilot LNG, said. "We look forward to beginning LNG bunker deliveries to customers in the second half of 2027."

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GLBP already secured permits from the Texas Railroad Commission, the state energy regulator, as well as the Texas Commission on Environmental Quality. Last year, it reached a supply agreement with Houston Pipeline Company (HPL) (Houston), a subsidiary of Energy Transfer LP (Dallas, Texas), to secure natural gas supplies for the proposed LNG bunkering port.

HPL operates about 3,900 net miles of natural gas pipeline, with a capacity to move 5.3 billion cubic feet per day (Bcf/d) of natural gas. Its network is connected to "historically significant" basins in south Texas and offshore, and it already is connected to distribution points up and down the Gulf Coast.

GLBP said LNG is finding a home in everything from Roll-on-Roll off, or RoRo, car carriers to container vessels and cruise ships. At Galveston, cruise ships typically make around 380 port calls each year.

The United States is already the world leader in natural gas production and exports of LNG. The amount of natural gas sent to the eight operational export terminals in the United States has averaged around 15 Bcf/d, a level the government expects will hold for exports throughout the year.

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