French orders to foreign shipyards

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74 are two other markets that will feature prominently, namely India and China. However, the nature of these markets will determine in which direction this industry will follow. India in particular is a truly developing nation but it is one that has its own peculiarities. LNG is traditionally a very political business but a constantly changing political platform in India makes long-term decision making somewhat difficult. Add to that the uncertainty of clients’ ability to pay then a 20-year “take-or-pay” contract seems difficult to operate. A further complication in the Indian scenario is an overwhelming desire of the Indian shipowners (and shipyards) to participate in the shipping operations. Although we have no doubts as to the capability of the Indian shipowners, some caution will need to be exercised. Careful choice of a suitably LNG experienced foreign partner, should see a technology transfer to enable the Indian owners to enter the famous LNG shipowners Club. The spot market This should be considered as short-term rather than true spot; the spot concept as we know in the oil market is still some years away but it is coming soon. Last year we forecast that the true spot deal may arrive by 2005, this year we would bring this date forward to the latest 2002. The LNG seller has traditionally controlled the destination of the cargoes and any buyer of the short-term cargo did not have the authority to discharge the cargo anywhere else than the named port in the contract. As more surplus cargoes have been moved, a greater flexibility has been requested. Today we have the three main LNG spot buyers, CMS, Duke Energy and Enron (all American!), having negotiated standard cargo purchase contracts which allow them to deviate a cargo whilst en route to the original destination. This is merely common sense given that all US destined cargoes loaded in the Middle East Gulf (MEG) will pass all of the main European markets. A truly significant development on the short-term trade was the arrival of Coral Energy. This is a fully owned subsidiary of Shell but their presence in this market is most noteworthy. Shell participates in many of the world’s LNG projects (Australia, Malaysia, Brunei, Nigeria and Oman) and thus has the traditional LNG take-or-pay contract approach to business. However, because of this presence in the projects they have been able to move many short-term cargoes. For example, earlier this year Coral was able to use a Nigerian LNG ship, that was chartered to Brunei LNG, for a single voyage from Malaysia LNG. They have also contracted to lift about 11 cargoes from Oman LNG during the latter’s build up phase for delivery into the USA. Once again taking advantage of a Shell link, as they will use the “Arzew”, a vessel time-chartered by Shell Bermuda that has spent most of the last 20 years in lay-up. Shell also retains an 8% shareholding in the Cove Point terminal so the use of this additional terminal capacity in the US market could well feature in their ambitions over the next three years. Abu Dhabi once again used one of their project-dedicated ships to move a cargo into Lake Charles for the account of Enron. Two voyages were completed in 1998 that were unusual at that time, but a repeat this year merely reflects the changing attitude of the projects. This is also reflected by the intentions of traditional Japanese buyers. There have been recent articles suggesting that the Japanese utility companies are looking into acquisition of their own ships to operate on short-term/spot cargoes. Certainly the idea that the world’s largest LNG buyer continues to pay the highest prices is not well received in a liberalising market. The contracts Although 1999 saw the first cargoes loaded out of Atlantic and Nigeria there were no new grass roots projects concluded. Australia and Malaysia expansion should be confirmed in 2000 and activity is increasing on the Yemen LNG project but still no firm decisions. India saw Metgas and Petronet both committing to 2.5 million tons per year and 7.5 million tons per year respectively. The Total project in Mumbai is looking promising for a 2003 start up and China’s first receiving terminal at Guangdong should be confirmed in March 2000 for first receipts of LNG destined in 2005. In Europe we have seen Enagas and Transgas confirm further gas purchases from Nigeria LNG, enabling the latter to commit to the construction of a third LNG train. Enagas would still appear to be on the verge of buying more gas from Atlantic LNG, should the partners in that project decide to press ahead with plant expansion. However, we understand that there is some disagreement amongst these partners and whilst a firm decision had been expected before end 1998, 1999 has passed without any firm decision being reached. In the Middle East, RasGas made its first cargo delivery when they sold a cargo to CMS using one of the Osprey vessels. Whilst there are two separate projects in Qatar, it is most unlikely that they will compete against each other for either long or short term business. With four different projects there could well be the formation of a GPEC similar to OPEC in the near future. In South East Asia, we have seen MLNG confirm its order for two new membrane type LNG vessels from Mitsubishi Heavy Industries yet no news on plant expansion. It would thus appear that the 2.5 million tons per year for Metgas in India come from surplus supply and not new product. Australia LNG is also very confident that it will secure sales to a potential new market in mainland China but also for the new terminal planned for north Taiwan. The infrastructure: liquefaction plants and regasification units In Australia, it is looking less likely that a second liquefaction plant will be built in Dampier, but rather further expansion at the NWS (North West Shelf) site. The formation of Australia LNG to market the Australian LNG would tend to confirm this. Tentative enquiries to the shipyards for new ships have already started but there is also a strong rumour that existing ships will be used. The “Arzew” will be open from mid-2001 and the ex-”Arun” vessels could be free from 2003.
In Malaysia, the Japanese market will continue to be important although the emerging Indian market is too tempting to ignore. However, the Indian market will not offer the similar level of netback. China is not a likely buyer as it is believed that China will want to buy fob whilst MLNG wishes to sell ex-ship. In Indonesia, after two rather difficult political years, there are encouraging signs that new contracts will be realised. Both Posco in Korea and Tuntex in Taiwan are understood to be negotiating for long-term gas supplies, the former on an ex-ship basis, the latter fob. In Japan, there are further indications that the LNG market is changing. The power companies are now referring to themselves as the powerless companies in view of the liberation of their domestic market. Whether such liberation will extend to open access to the terminals remains to be seen. If this does materialise perhaps we will see CMS, Enron and Duke moving cargoes into Japan rather than the USA. Figures produced by MITI (Japanese Ministry of International Trade and Industry) and IEA suggest that growth will be about 1 to 2% for LNG, however that was before the nuclear waste leak earlier this year. The nuclear expansion could well be halted but what will be the choice of alternative fuels. In Korea, privatisation plans are apparently causing some concerns to the existing suppliers. For instance what will be the status of the sovereign guarantee? The market is once again buoyant with consumption levels almost back to pre-November 1997. In Oman, first cargo is expected to be loaded in April 2000. The concerns over the Korean shipping capacity have been alleviated as Kogas has chartered in the MOL ship “Aries” for three years commencing January 2001. In Qatar, their two projects Qatargas and Rasgas continue to have a surplus, some 2.0 million tons Qatargas alone. Such excess capacity will be an important issue for short-term sales in 2000. In Yemen, it would appear that Total’s project in Mumbai is its first firm buyer. Turkey continues to be an interested customer, but Botas seeks to diversify its supply and Egypt would offer an excellent long-term trading partner. In Egypt, the race is definitely on between British Gas and BP Amoco to have the first plant. In Greece, the long awaited receiving terminal at Revithoussa finally received its first cargo in November 1999. The small vessel, “Century” delivered the first cargo from Algeria, for the account of Depa. In Spain, life continues to be full of uncertainty, mainly in consequence of a major political stand off between Repsol, Gas Naturel and Iberdrola. There has been little progress on the proposed receiving terminal planned for Bilbao although enlarging the existing three terminals is on schedule. Portugal would like to have its own terminal operational by 2003 which would free up some capacity at Huelva, as at present Transgas of Portugal receives all of its LNG via the Enagas terminal in Huelva. In Nigeria, construction of the two new train plants was completed in August with first gas delivered to Montoir in October 1999, i.e. on schedule. Plant expansion has also been confirmed. All of the LNG from this expansion is destined for Transgas and Enagas although we understand that if Shell secures a new sales contract into Brazil about 600,000 tons can be diverted to South America from Spain. In Brazil, Shell has agreed with Petrobras to start construction for a new receiving terminal South of Recife, at Suape, with an IPP as intended usage. Work is expected to commence in January 2000 with completion around 2003. The fleet The world fleet of LNG carriers, at end 1999 consisted of 113. The total capacity is 11,752,549 cbm, comprising of: up to 50,000 cbm 479,576 cbm 15 vessels 60-100,000 cbm 1,159,562 cbm 15 vessels above 120,000 cbm 10,940,411 cbm 83 vessels During 1999, five large vessels were delivered: “Doha” built in Japan for Qatar 137,500 cbm “Al Bida” built in Japan for Qatar 137,500 cbm “Hyundai Technopia” built in Korea for Kogas 138,000 cbm “Hanjin Muscat” built in Korea for Kogas 138,000 cbm “SK Summit” built in Korea for Kogas 138,000 cbm There are now no vessels in lay-up although the “Mystic Lady” is still without employment whilst a decision is made for her future. Unfortunately, cracks where found in all cargo tanks on the welded seams and the owners Leif Hoegh have withdrawn the vessel from service. The repairs on the tanks could be completed in about 8 months, such repairs effectively comprising of tank rebuilding. LNG Lagos, 122,255 cbm, blt 1976 by Chantiers de l’Atlantique, owned by Bonny Gas Transport, dedicated to Nigeria LNG project T h e l i q u e f i e d n a t u r a l g a s s h i p p i n g m a r k e t S H I P P I N G A N D S H I P B U I L D I N G M A R K E T S 2 0 0 0 75
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Bad and good reasons ? At the end o
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The shipbuilding market in 1999 The
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Quarterly orders in gross tonnage (
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In contrast, most Chinese shipyards
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As an example, production costs for
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China As it was the case last year,
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10 9.5 9 8.5 8 7.5 7 The European C
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The Asian challenge is clearly felt
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Norway Norwegian shipyards, which a
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The cruise market in 1999 1998 was
Page 23 and 24: success. Carnival tried in vain to
Page 25 and 26: European sector. Very few second-ha
Page 27 and 28: The containership market in 1999 Br
Page 29 and 30: (before absorption), Evergreen, P&O
Page 31 and 32: Teu 300,000 250,000 200,000 150,000
Page 33 and 34: 4,000-4,999 teu 17% 3,000-3,999 teu
Page 35 and 36: The reefership market in 1999 Anoth
Page 37 and 38: The spot market Compared to 1998, t
Page 39 and 40: concluded until very late. • Expo
Page 41 and 42: The dry bulk market in 1999 The pes
Page 43 and 44: 14 12 10 8 6 4 2 0 Jan 96 US$/tonne
Page 45 and 46: US$/day 15,000 13,000 11,000 9,000
Page 47 and 48: older ladies in the 15 years-old br
Page 49 and 50: The tanker market in 1999 Crude •
Page 51 and 52: 15% At the same time, youth in the
Page 53 and 54: for us just how stagnant this marke
Page 55 and 56: their specifications and their SBT
Page 57 and 58: Dwt 12,000,000 10,000,000 8,000,000
Page 59 and 60: The chemical carrier market in 1999
Page 61 and 62: the previous year. Deliveries for t
Page 63 and 64: There are two corollaries to this.
Page 65 and 66: The liquefied petroleum gas shippin
Page 67 and 68: We believe that further consolidati
Page 69 and 70: In this respect, the Chevron/Dynegy
Page 71 and 72: Perceptions As mentioned, the conso
Page 73: The liquefied natural gas shipping
Page 77 and 78: The offshore market in 1999 Allow u
Page 79 and 80: The oil-drilling world also acknowl
Page 81 and 82: 35,000 30,000 25,000 20,000 15,000
Page 83 and 84: The fishing vessel market in 1999 D
Page 85 and 86: 45,000 40,000 35,000 30,000 25,000
Page 87 and 88: The marine insurance markets in 199
Page 89 and 90: of future resources in order to mee
Page 91 and 92: French shipyards deliveries and ord
Page 93 and 94: Chantiers Piriou • Ships delivere
Page 95 and 96: French orders to foreign shipyards
Page 97 and 98: • Samsung (South Korea) FDS 2000
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French orders to foreign shipyards

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