French orders to foreign shipyards

76
90
80
70
60
50
40
30
20
10
0
Number of ships
Several ships were ordered in 1999:
• Brunei LNG: one new Moss type from Mitsubishi Heavy
Industries. Delivery June 2002.
• MLNG: two new membrane type from Mitsubishi
Heavy Industries. Delivery October 2002.
• Nigeria LNG: two new Moss type from Hyundai Heavy
Industries. Delivery October 2002.
The most significant change in 1999 has been the fall in
prices. The last vessel ordered was by Nigeria LNG at a
reported price of about $157 million.
The “old lady”, the “Cinderella”, is still on charter to Enagas
and is performing well. The charter has been extended
for a further 12 months.
Conclusion
The LNG industry has for many years been very conservative
in outlook with the contracts based on long-term takeor-pay
basis. Whilst such an approach was necessary
when the industry was in its infancy the market has
changed and the new market wants flexibility. As the USA
will become a predominant buyer of LNG, the take-orpay
concept will not apply as that market operates on a
supply and demand concept where prices can fluctuate
very quickly. Furthermore, LNG price will compete direct
with pipeline gas price and not with a crude oil price
index or any other of the complex fuel indices.
The LNG trading market will develop more quickly than
previously perceived possible and the spot trade will
develop with the trading.
Unfortunately, the only speculative newbuilding was
done in 1999 by an LNG exporter, but this was limited
speculation. The sales contract with Metgas was signed
about four weeks after the yard contract. However, with
yard prices at the lowest ever level it can only be a matter
LNG carrier fleet as at January 1, 2000
existing
on order
under 50,000 cbm 60-100,000 cbm 120,000 cbm and over
of months before someone takes advantage of these
good offers. The risk on speculation is not the same as it
was when players last tried it (late 1970’s). The globe is
now covered by LNG producers and markets are active.
There are several new projects in the planning stage and
the existing fleet is getting older. With a delivery schedule
of 30 months any order placed in 2000 should have
excellent prospects of securing long-term employment in
2002/2003.
Why not starting the new millennium in style: risk a speculative
new ship (or four)!