Concentration moves have also affected this size segment with Schulte joining the Unigas pool and a joint marketing venture between Gaschem and Medgas pool.

LGS of Edinburgh, one of oldest partners of Unigas pool, having contracted several newbuildings over the past two years (6,250 and 8,600 cbm), has now decided to take over the marketing of its ships (Tarquin International), representing a total of 15 semi-refrigerated ships within a size range of 3,400 to 8,600 cbm.

The petrochemical gas market did not supply regular employment for those ships although a slight improvement was observed during last quarter from the South East Asia / Far East inter-regional markets.

The pressure ships, mainly employed on LPG, were traded at very low levels, reaching rock bottom levels not seen in recent years - ie $125,000 monthly for a 5,000 cbm pressure ship on three to five month time charter basis - and quite a few of the previous t/c commitments were not renewed. Charterers preferred to play spot or cover their requirements with contracts of affreightment.

Gaz Galaxy 5,060 cbm, blt 1984 by Saiki, owned by Naftomar Shipping

Second-hand market

In order to be able to sell in 1998, with the disappearance of Chinese and Far East buyers, it was necessary either to offer ships with attached employment or to accept a sale on the basis of a bareboat charter, and even then only on condition that the ship was no more than 20 years old.

It was in this context that, at the beginning of the year, the MC Shipping group in Monaco continued its 1997 policy, reinforcing its fleet by buying the pressurized ships "Malvern" (3,200 cbm, built in 1990) and "Coniston" (4,000 cbm, built in 1991), with attached charters, while Knud I Larsen took over the "Balder Phoenix" (3,500 cbm, built in 1982) on the basis of a price of $4.5 million payable over 5 years.

Kosan was only able to dispose of the "Erik Kosan" (2,500 cbm, built in 1978), by a sale on a bareboat basis, for a price of $1.2 million.

In the light of the above brief review of the various market sectors, we see that the shipping availability has been considerably reshuffled into a few larger controlling owners - operators offering a wider range of ships within specific size segments and traffic areas, and increased flexibility on given trades. A similar development was also seen in the oil sector and other major industries with several consolidations and mergers being achieved.

Whilst charterers may regret a possible lack of competition on ownership side, the longer term impact will most likely serve the gas industry well providing owners not to overuse their extended responsibility and positions. At the same time, owners should remain prudent in their ordering of newbuilding tonnage in spite of recent attractive opportunities, which are always difficult to disregard on a case by case basis depending fleet structure considered and employment opportunity.

1998 has produced low a clear sky is still to come returns on investments; for shipowners some results often near or below the operational costs of their ships, and similarly below trading economics on the product side.

Considering such poor results and that the worst of the general economic turbulence experienced during the past twelve months may have passed - one should remember that in most Asian languages the word "crisis" also means "opportunity" - the year ahead should only show improvements and better results, perhaps boosted by the reality and psychological effect of the introduction of the euro.