LNG Yearbook 2016: The Comprehensive Reference Guide to the

Liquefied Natural Gas Infrastructure Market 2016-2026:

Capex Forecasts For Large-Scale Onshore Liquefaction & Regasification,
Floating LNG (FLNG), Small-Scale LNG and LNG Carriers

5.5.10 SPB Containment System Market Forecast 2016-2026

Table 5.19 and Figure 5.52 display the size, forecasted growth and projected market share of the
SPB LNG containment system market over the period 2014-2026.

Table 5.19 SPB Containment System Market Forecast 2016-2026 ($m, AGR %, CAGR
%, Cumulative)
SPB
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016-2026
CAPEX $m 153 153 225 143 215 143 72 0.00 0.00 0.00 0.00 0.00 951.7
AGR (%) - 46.7% -36.3% 50.0% -33.3% -50.0% -100.0% - - - -
CAGR (%) 2016-21 -14.1% 2021-26 -
CAGR (%) 2016-26 -
Source: Visiongain 2016

Figure 5.52 SPB System Market Forecast 2016-2026 ($m, AGR%)

250

200

150
Capex ($m)

100

50

-
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

CAPEX $m

Source: Visiongain 2016

The SPB containment system has been developed in by the Japanese Ishikawajima- Harima Heavy
Industries (IHI) and received approvals from major classification societies in the 1980s. SPB means
self-supporting prismatic IMO Type B independent tank. Independent meaning the tank is fitted to the
ship’s hull but not an integral part of it, and Type B meaning its IMO classification of “Construction and
Equipment of Ships carrying Liquefied Gases in Bulk”.

Currently only two LNG carriers operate with this system, namely Arctic Spirit built in 1993 and Polar
Spirit built in 1994. SPB – after a hiatus of more than 20 years – made a comeback in the order book
with two vessels scheduled for delivery in 2017.

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 LNG Yearbook 2016: The Comprehensive Reference Guide to the
Liquefied Natural Gas Infrastructure Market 2016-2026:
Capex Forecasts For Large-Scale Onshore Liquefaction & Regasification,
Floating LNG (FLNG), Small-Scale LNG and LNG Carriers
Another driver is that the development of the country’s energy infrastructure and the diversity of the
energy supply has become a top priority for the government. Since 2009, the focus of stimulus capital
injected by the Chinese government had focussed on property and underwriting credit for the
construction of this real estate. Infrastructure, and energy infrastructure, is now the priority. China’s
structural supply shortage in natural gas is, within this priority, top of the agenda. Inevitably, as more
LNG import terminals are built, the LNG carrier element of the value chain must expand too.

Figure 2.19 shows the volume of LNG imports by country in 2014. By 2022, China will far surpass
South Korea in terms of LNG import capacity. According to BP, the country imported 18.6MMmtpa in
2013 and visiongain estimates the country has 6,495MMcf/d of import capacity under development
via new or expanded import terminals along the East Coast of the country (see Table 10.7). As
imports continue to grow, the demand for LNG carriers will change accordingly.

Table 10.7 Under Development Chinese LNG Import Terminals (Terminal Name,
Status, Owner, Capacity MMcf/d)
Capacity/
Expansion
Name of Terminal Status Owner Capacity
(MMcf/d)
Dapeng Operational- Expanding CNOOC / BP 885 – 530
Mentoglou Operational Shanghai Gas Group 15
Fujian Operational CNOOC / Fujian Co. 345
Shanghai Operational – Expanding CNOOC / Shenergy Group 395 – 395
Dalian Operational- Expanding CNPC 395 – 395
Rudong Operational- Expanding CNPC- RGM International - CITIC 460 – 395
Zhejiang Operational CNOOC 395
Zhuhai Operational- Expanding CNOOC – Yudian Group 460 – 460
Tianjin FSRU Operational -Expanding CNOOC 290 – 795
Caofeidian Operational CNPC – Beijing Municipal Government 460
Qingdao Operational- Expanding Sinopec – Huaneng Group 395 – 265
Hainan Operational- Expanding CNOOC – Hainan Development 260 – 130
Beihai Operational- Expanding Sinopec 395 – 395
Shenzhen Construction CNOOC – Shenzhen Energy 530
Tianjin Construction Sinopec 395
Shantou Construction - 2 Phases SinoGas 160 - 240

www.visiongain.com Page 483

 LNG Yearbook 2016: The Comprehensive Reference Guide to the
Liquefied Natural Gas Infrastructure Market 2016-2026:
Capex Forecasts For Large-Scale Onshore Liquefaction & Regasification,
Floating LNG (FLNG), Small-Scale LNG and LNG Carriers

17. Expert Opinion

17.1 Kentz (A Member of the SNC-Lavalin Group)
John Jeffers is the Group Development Director of Kentz and has Global responsibility for the
effective Key client account management and strategic pursuits. He has extensive experience of the
Oil & Gas sector across the Middle East, executing capital investments in Saudi Arabia, Oman, Qatar,
Egypt, Kuwait, Yemen and the UAE. Holding an MBA in Management of Major Projects, Post
Graduate Diploma in Business Studies and Marketing, John is also a Fellow of the Institute of
Directors, Learned Member of the Nuclear Institute, and a Member of the Association of Project
Management.

Visiongain interviewed Mr. Jeffers in October 2015 and would like to thank him for his astute insights.

Kentz, a Member of the SNC-Lavalin Group, is a global engineering specialist solutions provider, with
15,500 employees operating in 36 countries worldwide. They provide specialist Engineering,
Procurement and Construction (EPC) services, direct hire Construction, and Technical Support
Services (TSS) to clients in the energy and resources sectors.

17.1.1 Kentz’s Involvement in LNG

Visiongain: Please describe the work of your company and its involvement in the LNG industry.

John Jeffers: Kentz is now part of the SNC Lavalin group out of Montréal, Canada. Like Kentz, SNC
Lavalin has also been a major player in the LNG sector, therefore there was obvious synergy and we
have now married that into a single cohesive global strategy for LNG. One of the main initiatives that
we are targeting after post acquisition is to harness the skills competencies and track records that
both companies have, providing a much broader offering to customers.

Kentz have a number of contracts for which we have completed and some which are ongoing across
Australia. We have built major construction villages as an EPC contract and we also undertook work
on the telecoms elements across these investment.
We have also been undertaking a direct construction role with various strategic partners both at
Gorgon LNG and at the Ichthys Project in Darwin, also Australia.

17.1.2 LNG Project Costs

Visiongain: Why have LNG projects suffered from cost overruns?

www.visiongain.com Page 682