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Background and Problem Statement
The paper (Industries Energy, Utilities & Mining,
2007) has highlighted as the following:
“Many companies are struggling to optimize
their LNG portfolio of assets and contracts in
a way that maximizes value. Opportunities
for ‘arbitrage’ profits require ever more
clever valuation and modeling. The companies
that identify, assess and manage the
increasingly complex interdependencies and
uncertainties in the evolving LNG market will
be the ones who take the profits. LNG relies
on two vital ingredients – infrastructure and
gas”
The situation has indirectly rerouted the
existing LNG system into a new market regime
especially on its facilities from onshore to the
coastal trend. It has induced the market player
to get into this particular regime as it requires
no land requisition. Thus a real ‘new world gas
market’ began to emerge. However a ‘world gas
market’ should not be confused with the much
more flexible world oil market (Jensen, 2004).
The Industries Energy, Utilities & Mining (2007)
also highlighted on the regulatory aspects fol‐
lows:
“Taking account of regulatory risk “LNG operations
are spreading to many new locations.
The maturity and format of regulatory
frameworks vary considerably. The economic
viability of an LNG chain can be influenced
significantly by national or regional regulation,
particularly on regasification facilities.”
Although several frameworks have
been developed by the LNG players such as Ball
et al, (2006), who proposed a legal framework
for the Taiwanese government it is specifically
for procurement activities in Taiwan. As in Not‐
teboom et al (2004), the only focused area in
Snøhvit project Norway is on LNG port manage‐
ment. There is no formal framework to govern
MIMET Technical Bulletin Volume 1 (2) 2010
the carriage of this particular dangerous goods
carriage. Hence, a special attention on the de‐
velopment of the Legal Framework on the
Coastal Water for LNG transportation and appli‐
cation is required.
The immediate sign of market demand is
the clear indication that LNG transportation will
centre on the downstream activities as compared to
the upstream. Product distribution which cover the
following aspects:
�Overcoming problems associated with the trans‐
portation of LNG by land.
�Towards cost effective LNG transportation in
downstream market activities.
�Provision of a healthy, safe and secure environ‐
ment of LNG transportation /carriage within
coastal water.
Morimoto (2006) estimated the world LNG
consumption exponentially rises from 139 m/tons
to 286 m/tons in his JGC Fiscal Interim Result. The
above prediction is supported by Nilsen (2007),
research on LNG Trade Volume, where momen‐
tous growth of short‐term trade from 1998 to
2006 as shown in Figure 2.1. Thus, existing facili‐
ties need to be tripled by 2020 by all means and
sizes as in Figure 2.2.
| MARINE FRONTIER @ UniKL
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