LNG shipping market in 2003
The world of
LNG shipping never ceases to amaze and it is difficult
to pick up any journal without there being at least one
reference to LNG.
ended with doom and gloom for US energy players, 2003
saw the US market featuring heavily in most LNG
forecasts. There would appear to be numerous proposed
import terminals for east and west coast of the USA and
if all were to be completed there is not enough
shipyard capacity to sustain that demand if they were
all to arrive on quoted schedule! The realistic view
however is that maybe 6-7 will mature to completion,
with Freeport, Port Pelican, Altemeira, Corpus Christi,
Sabine Pass, Bear Head LNG on the east coast and Baha
announced (prematurely?) that they envisage the
requirement for 48 ships for their Qatari ventures. If
this is to be the case, any other project with start-up
scheduled for the same time frame (2007-2010) will
possibly be treated as the poor relations by shipowners
and the shipyards.
will be the US or not, what is clear from LNG reports
today is that most LNG expansion will be focused on the
Atlantic Basin. The UK, that was the first importer of
LNG but ceased in 1990, is now looking to have at least
two new import terminals in the near future. Isle of
Grain should be in operation by early 2005 and Exxon in
Milford Haven by 2008. How times change, but the UK�s
North Sea gas was never going to last forever.
began with a fleet of 138 and it ended with a total of
169. The last ship to be handed over to its owners
Repsol-Enagas was the �Castillo de Villalba�, in
December by Izar. There were two vessels scheduled for
2003 but these were slightly delayed due to the typhoon
�Maemi� that swept through the Korean yards in
September. The �Disha� and �Golar Frost� are due for
delivery very early in January 2004.
France finally ordered a new 153,000 cbm vessel, like
their 74,000 cbm �Gaz de France energY�, with diesel
electric propulsion from the French yard Chantiers de
l�Atlantique with a delivery of end 2005. This vessel
is intended for use in their Idku project and/or the
Snohvit project. A second vessel is expected to be
ordered in the second quarter of 2004 for an October
participants entered the LNG club in 2003: Maran Gas
Maritime, the gas division of the Angelicoussis group
and J&S Cheniere. Maran is a shipowner who has ordered
two new 145,000 cbm vessels from DSME for delivery
October and November 2005. Maran also has two more
options for 2006 and 2007. J&S Cheniere arrived on the
LNG scene when they quietly sneaked in and chartered
the �Tenaga Empat� for up to four years from MISC. J&S
Cheniere is an LNG trading company with eyes on the US
and Atlantic basin market. (Cheniere have intentions to
build 3 of the US terminals mentioned earlier in this
Galleon� was out of action for a few months in the
middle of the year after it broke down in the
suffered an unfortunate gearbox failure. As luck would
have it the owners were able to secure a replacement
which enabled the vessel to be back in service after
months rather than years, if the contract had been
ships under construction for Gaz de France, at
Chantiers de l�Atlantique are some kind of forerunners
both in the fields of propulsion (being the first LNG
carriers with a gas-diesel-electric engine) and cargo
containment system with the new CS1 membrane. Everyone
will carefully observe the first steps of these vessels
which performances would motivate further orders based
on these technologies.
main talking point is the use of larger vessels.
ExxonMobil have been pioneering development of very
large LNG carriers in order to try and minimize the
transportation costs on their anticipated long-haul
routes from Qatar to the UK and the USA. Up to 250,000
cbm are presently under consideration. One problem
presented with the very large vessels is compatibility
with existing infrastructure. They will be suitable for
new terminals that are planned for construction in the
US and at Milford Haven but are probably too big for
most existing terminals, especially those in Japan. For
an industry that is moving to offer maximum flexibility
in the new sales contracts it seems a little strange to
build in obsolescence. It could be that the LNG
industry might repeat the example of the oil tanker
industry of the late 70�s when the 500,000 dwt ULCCs
were built that could only go to Antifer. They were
soon cast aside: such a fate for the LNG carriers would
be a very costly exercise.
projects came on stream this year but there was plenty
of talk for ones to come.
attention seeker has been the expansion in Qatar with
Exxon and ConocoPhillips each going for 15 million ton
projects for 2007-2009. This has prompted talk of up to
48 ships to be ordered.
Sakhalin signed its
first LNG sale-purchase agreement with Tokyo Electric
but there is still a lot of unsold cargo to be disposed
Guinea looks to have sold its planned capacity to BG
with a proposed start-up of 2007.
LNG receiving terminals were added to the existing 37.
Sines in Portugal.
terminals are planned for Spain at Ferrol (Reganosa)
Valencia. Italy should get two more with
Brindisi and Rovigo
the favorites for development. Fos 2, the new terminal
proposed by GdF and Total, has stumbled upon
environmental problems (but most terminals encounter
this at planning stage) but is expected in 2007.
been no official contract declared for the Guangdong
terminal in China but a signature is expected soon.
Castillo de Villalba
138,000 cbm, delivered in 2003 by Izar Puerto
Real, owned by the Elcano Group
LNG has received
tremendous press coverage this year with the US receiving
the ultimate boost when Alan Greenspan declared that more
new terminals need to build and fast to avoid a gas
As ever there is
usually more talk than action but what is clear that for the
foreseeable future gas has a future in the energy sector of
most countries and as such LNG is often the only way to
deliver it. Qatar could be the biggest LNG exporter in the
world by the end of the decade with LNG being transported
over ever increasing ton/miles. Such a thought is only good
news for shipping.
What is perhaps
not so good for the existing participants is that the
industry needs new entrants to cater for the rapid growth.
There are numerous very good tanker operators on the wings
who want to participate but none like Angelicoussis who has
taken the plunge, with his Maran Gas, to order ships to
facilitate his membership of the �Club�. You have to pay the
price to get your ticket to enter this club.
Shipping and Shipbuilding Markets in 2003
I N D E X
- Via Raffaele Paolucci 17r/19r - 16129 Gênes - ITALIE
tél.: +39.010.2462122, fax: +39.010.2516768, e-mail