Work is to begin on investigating opportunities for the supply of liquefied natural gas (LNG) to customers in the north of the UK and North Sea.

A Memorandum of Understanding (MoU) was signed between ExxonMobil, Babcock International Group, Bernhard Schulte Shipmanagement (BSM), Calor and Orkney Islands Council on Tuesday, 22 November.

The agreement opens the way to investigate methods of developing the infrastructure, storage and technical support for the 'Caledonia LNG' project.

The scheme is being taken forward after the International Maritime Organisation (IMO) approved plans to implement a global 0.50% sulphur cap on vessel emissions in 2020. This is likely to drive up demand for compliant low-sulphur fuel options, which could include LNG.

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ExxonMobil will explore the potential for its global marine network to deliver LNG bunker fuel to customers in the region, in addition to providing technical support and expertise to allow safe LNG bunkering operations.

Babcock will provide its experience of storage, handling and distribution of LNG, while BSM is in charge of supervising the building, management and operation of the marine craft and related assets for the project.

Calor will investigate further opportunities to supply LNG to industrial and automotive sector customers, while the council will support port services and security.

Luca Volta, LNG Venture Manager at ExxonMobil Marine Fuels, said: "The Memorandum of Understanding is a clear indicator that ExxonMobil, Babcock International Group, Bernhard Schulte Shipmanagement (BSM) and Calor are determined to leverage their history and expertise with LNG to work with Orkney Islands Council to maximise the possibilities for customers.

"We will also draw upon our extensive global marine network to provide our customers in northern UK and the North Sea with LNG bunker fuel."

(LM/CD)