Qatar Petroleum Signs Deal for Mega-LNG Expansion

LNG NEWS WEEKLY DATE 12th FEBRUARY 2021
QATAR PETROLEUM SIGNS DEAL FOR MEGA-LNG EXPANSION

Qatar Petroleum (QP), the world’s top liquefied natural gas (LNG) supplier, signed a contract on Monday for the first phase of
its North Field LNG project expansion, aiming to boost the country’s LNG output by 40% a year by 2026. The expansion,
which will take Qatar’s LNG production capacity to 110 million tonnes per annum (mtpa) from 77 million mtpa, is the largest
single LNG project ever to be sanctioned, according to consultancy Wood Mackenzie. QP signed a contract covering major
onshore engineering, procurement and construction at the expansion project, known as North Field East, with a joint venture
between Chiyoda and Technip.Production from that phase will start by the fourth quarter of 2025 and reach full capacity by
late 2026 or early 2027, QP’s CEO Saad al-Kaabi said in a virtual news conference.“The total cost of the project will be
$28.7 billion, making it one of the industry’s largest investments in the past few years and largest LNG capacity ever built,”
Kaabi said. Kaabi, who is also Qatar’s energy minister, said that while QP is ready to develop the North Field alone, a bidding
process for international oil firms to take up to a 30% stake in the project’s first phase will start next week. He said he expects
a decision to finalise partnerships with oil companies for the field’s expansion by the end of this year.
Sandp@cygnus-energy.com Gas@cygnus-energy.com
(Sale and Purchase) (Gas projects)
ExxonMobil, Royal Dutch Shell, Total and ConocoPhillips are long-standing partners in Qatar’s LNG plants.A second phase,
known as the North Field South project, is expected to lift Qatar’s LNG production capacity further to 126 mtpa by 2027. Kaabi
said QP is currently evaluating a further increase in LNG capacity beyond the 126 mtpa. “I would say ‘stay tuned’,” he added.
The new capacity from North Field East, an LNG export plant being developed in the United States with Exxon Mobil Corp,
and expiring long-term LNG contracts from some existing projects mean Qatar’s export volumes are increasing, Wood
Mackenzie research director Giles Farrer said on Tuesday. “We estimate it will have over 75 million mtpa of uncontracted LNG
volume to sell by 2027, around 70% of its LNG portfolio,” he said. At a long-term breakeven price of just over $4 per million
British thermal units, Qatar’s LNG production is at the bottom of the global LNG cost curve, alongside Arctic Russian projects,
Farrer said. “Qatar is pursuing market share. This FID (final investment decision) is likely to put pressure on other pre-FID
LNG suppliers, who may find Qatar has secured a foothold in new markets.” source : www.reuters.com
SHELL GOBBLES UP LOW-EMISSIONS LNG NEWBUILDINGS IN LONG-

TERM CHARTERS
Shell has chartered at least 22 LNG newbuildings to support its global gas portfolio, while a recently delivered FSRU heads
to an historic Asian gas-to-power project. Six weeks into 2021 and eight LNG carriers have been ordered, pushing the global
orderbook to 172 LNG carriers, with a total capacity of 24,428,062 m3, according to BRL Newbuilding Weekly. One of the
world’s largest LNG shipping operators, managing and operating over 40 ships and with some 50 on time charter, Shell has
been active in the chartering market, including striking a deal with South Korea’s Pan Ocean. With ambitious plans to expand
its LNG shipping portfolio, Pan Ocean inked long-term charter agreements with Portugal’s Galp Energia and Anglo-Dutch
energy company Shell worth US$421M for LNG newbuildings ordered from Samsung Heavy Industries (SHI) and Hyundai
Heavy Industries (HHI). SHI will build a 174,000-m3 newbuild for US$183M, with delivery of the vessel in April 2023. This
newbuilding will go on time charter under a deal inked on 30 December between Galp Energia and Pan Ocean, valued at an
estimated US$115M. The five-year contract will start February 2023, with two Galp options that could extend the charter to 11
years. With one 2008-built very large gas carrier, Pan Ocean reportedly placed LNG carrier orders in mid-December with
HHI. Pan Ocean entered into a long-term time charter contract for two LNG carriers with Shell Tankers Singapore Private
Limited on 15 December for an estimated US$306M. The seven-year contract will start from September 2024, with options
that could extend the charter to 13 years. Overall, the Anglo-Dutch energy major has chartered 22 LNG newbuildings “with
more to come,” says BRL Weekly Newbuilding. “We recently recorded four very large gas carriers for undisclosed account with
Shell employment,” reported BRL. “Two of these have been confirmed for ownership of Pan Ocean Co, South Korea and
marks their debut with commitments from Shell. The former intends to break into LNG in a big way.” Most of the charters for
the newbuildings have been secured at a rate of US$60,000 a day over seven-year periods, with options for extensions.
“Brokers consider these to be very low rates, but permanent employment is procured by the shipowners,” said BRL, adding
that all of Shell LNG vessels “are aimed at the lowest emissions status and likely to operate on WinGD dual-fuel propulsion.”
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Seven LNG carrier newbuilds have been chartered by Shell from Norway’s Knutsen Group, the most recent one ordered from
Hyundai Samho Heavy Industries (HSHI).
Another Shell charter

Shell has signed a long-term charter with Sovcomflot valued at US$165M for the 174,000-m3 LNG carrier SCF Timmerman,
delivered by HSHI in January. With an overall length of 299 m, beam of 46.4 m and depth of 26.5 m, the Liberian-flag vessel
is built to Bureau Veritas class, and under the technical management of SCF Management Services (Dubai) Ltd. SCF
Timmerman is the third vessel in a series of new-generation Atlanticmax LNG carriers ordered by SCF Group in 2018. The
lead vessel of the series, SCF La Perouse, was delivered to SCF in February 2020 and is time chartered to Total. “The LNG
carriers incorporate the latest technologies in terms of safety, environmental protection, and energy efficiency” The second
vessel in the series, SCF Barents, was delivered to SCF in September 2020 and is time chartered to Shell. According to
SCF, the LNG carriers in the series incorporate the latest technologies in terms of safety, environmental protection, and energy
efficiency, with their fuel consumption substantially reduced compared to the preceding generation of vessels. Each LNG carrier
is equipped with GTT’s Mark III Flex cargo containment system, WinGD’s slow-speed, Otto-cycle, dual-fuel X-DF engine,
and a system that reduces nitrogen oxide emissions while the vessel sails in liquid fuel mode. Additionally, all vessels of the
series are among the first globally to feature a boil-off gas partial re-liquefaction system, which significantly reduces cargo
losses while on long voyages or awaiting cargo operations.
FSRU for gas-to-power project

Among the other notable deliveries for Q1 2021 is Jawa Satu, which will serve as the floating storage and regasification unit
(FSRU) for the first gas-to-power project in Asia, in connection with electric generation and gas-related facilities. Pertamina
president director and chief executive Nicke Widyawati marked the occasion by declaring: “This will be an historic moment in
the development of the energy industry, especially in energy sustainability in Indonesia.” Built by SHI, Jawa Satu will be
deployed for 25 years supporting the gas-fired power plant. With an LNG storage capacity of 170,150 m3, Jawa Satu has a
length of 292.5 m, beam of 43.4 m, and regasification capacity of 300 mmscfd. FSRU owner Jawa Satu Regas (JSR) is a
joint venture of Indonesia’s state-owned oil company Pertamina, Japan’s Marubeni and Sojitz Corp.
PT Jawa Satu Power, jointly formed by Pertamina, Marubeni, and Sojitz, owns and operates the onshore gas-fired power
plant that will generate 1,760 MW of electricity. Commercial operations at the plant are expected to start in December 2021.
Located 14 km offshore in the Cilamaya Sea, east of Jakarta, Jawa Satu will store and regasify LNG, supplying fuel to the
power plant via pipeline. Electricity produced by the plant is sold to the Indonesian state-owned electricity utility PT PLN
(Persero). The project is also a feather in the cap of Mitsui OSK Lines (MOL), which supervised the construction of the FSRU
and will provide maintenance and operational services. MOL continues to build its presence in the FSRU market.
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LNG hub development
Indonesia, meanwhile, has plans to develop itself as an LNG hub in Southeast Asia. It took a big step in January when it
shipped its first international LNG cargo from the Arun LNG terminal in seven years. Pertamina subsidiary Perta Arun Gas
(PAG) reported the cargo was shipped under a free-on-board (FOB) contract using the 2004-built LNG carrier Hongkong
Energy. Under the LNG FOB contract, the buyer lifted the LNG from the Arun LNG terminal and transported it to the Caofeidian
(Tangshan) LNG regasification terminal, Hebei, China. Commercially managed by South Korea’s Sinokor Merchant Marine, the
Marshall Islands-flagged LNG carrier has a capacity of 140,500 m3. Currently, Arun LNG terminal has four LNG storage tanks
with a total capacity of 460,000 m3, two of which are dedicated for Indonesia’s domestic demand and two for export. PAG
vice president of corporate strategic planning and business development Surkani Manan called the international LNG shipment
“an important milestone for PAG”.PAG has aspirations of making Arun LNG terminal one of the LNG hub players in the
Southeast Asia region, according to Mr Surakani.To underpin its plans, PAG and its affiliates are studying a potential investment
in an additional LNG tank with the aim of increasing the storage capacity. Other market opportunities being explored are fuel
oil bunkering, LNG bunkering, cold storage and O&M services for LPG transhipment. Source : www.rivieramm.com
SHELL EYES LNG EXPANSION

Shell aims to expand its LNG portfolio in the coming years, with plans to create additional demand in new markets, as part of
its energy transition strategy.The firm aims to create 3mn t/yr of additional demand from new markets by 2025, the firm said
in its energy transition strategy presentation. New target markets include the Philippines, Indonesia, Brazil, Pakistan and the
Bahamas.Shell is also looking to expand its LNG portfolio with additional offtake agreements, including its 2mn t/yr deal with
Mozambique LNG and a similar contract with US firm Venture Global, the developer of the 10mn t/yr Calcasieu Pass export
facility. Additional agreements will add to Shell's production capacity, which is expected to increase by 7mn t/yr by 2025 once
the Canada LNG facility and the seventh liquefaction train at Nigeria's Bonny liquefaction complex are on line.The firm plans
to invest only in competitive LNG assets with a technical cost of less than $5/mn Btu, the firm said. This would be in line with
its average existing cost, which has fallen by approximately 40pc to $4.80/mn Btu from about $8/mn Btu in 2015. Shell
expects global LNG trade to continue to expand in the coming years and reach roughly 670mn t/yr by 2040. Global LNG
deliveries totalled 365mn t in 2020, according to Vortexa. Shell delivered 70mn t of LNG last year, it said, with its fleet of
LNG carriers standing at 60 vessels. Source : https://www-argusmedia-com.
CARBON NEUTRAL OR ‘GREEN’ LNG: A PATHWAY TO THE ENERGY

TRANSITION
For LNG to play its role in the energy transition, all stakeholders must get involved in reducing the CO 2 emissions in the LNG
supply chain, writes GECF Secretariat senior energy forecast analyst, energy economics and forecasting department, Dr
Hussein Moghaddam As the cleanest-burning hydrocarbon, natural gas will continue to be in demand in the decades ahead.
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Estimates are demand will rise by 50% from 3,950 billion cubic metres (bcm) in 2019 to 5,920 bcm by 2050, according to
the 2020 edition of the GECF Global Gas Outlook 2050. In spite of that, meeting global targets for climate change mitigation
remains our biggest challenge. Significant emissions are released through the combustion of gas to drive the liquefaction
process, while any carbon dioxide (CO2) detached before entering the plant is frequently emitted into the atmosphere.
Subsequently, investors, regulators, and customers exert mounting pressure on the gas industry, as it needs to do more to
accomplish climate objectives and focus on reducing emissions. More than 120 countries have already developed a climate
risk strategy that sets targets to reduce greenhouse gas emissions (GHG) to net zero by 2050. As natural gas has a central
role to play in mitigating carbon emissions, LNG producers have started to look for ways to minimise or counterbalance their
carbon footprints, thus ongoing LNG decarbonisation efforts are likely to expedite. Accordingly, top LNG producers, traders,
and consumers have indicated their plans to decarbonise the LNG supply chain. This is being done in two ways: by offsetting
emissions from individual cargoes retrospectively, as well as by building low-emissions liquefaction terminals. As a result, the
term ’green LNG’ has appeared as a new product within the LNG industry.
Carbon-neutral or ‘green’ LNG

The carbon neutral or green LNG market is an emerging prospect whereby green indicates either the reduction of GHG, or the
offset of GHG emissions, linked to some, or all elements of the LNG value chain - from production of upstream gas and
pipeline transportation, to liquefaction, transportation, regasification and downstream utilisation of natural gas. Companies in
the LNG value chain can diminish GHG emissions in numerous ways. For instance, by using biogas as feedstock; by decreasing
emissions from upstream, pipeline, and liquefaction facilities; by applying renewable energy to power their liquefaction plants;
respectively, by using carbon capture, and storage (CCS), or carbon capture, utilisation and storage (CCUS) technologies by
re-injecting CO2 into the subsurface after it has been detained during the processing of the feed gas before liquefaction.
Therefore, it should be taken into account that carbon-neutral does not mean the LNG cargo generates zero emissions, rather
that LNG sellers can counterbalance their GHG emissions by obtaining offsets to compensate for all or part of their GHG
emissions or the utilisation of carbon credits, which reinforce reforestation, afforestation or other green projects. It is worth
nothing that last year the leaders of the G20 endorsed the concept of the circular carbon economy (CCE) and the GECF is
the part of this process. The CCE aims to include a wide range of technologies such as CCS/CCUS as a way to promote
economic growth and to manage emissions in all sectors.
Applying a combination of strategies

By contrast, Qatar Petroleum (QP) applies a combination of strategies to reduce its emissions. Its future LNG production will
be low-carbon based, as QP is building a CCS facility alongside its 126 mta liquefaction capacity expansion by 2027. As part
of its new sustainability strategy, QP has announced that its aim is to reduce the emissions intensity of its LNG facilities by
25% by 2030. The capture and storage of CO2 from its LNG facilities of about 7 mta by 2027 is another goal. Furthermore,
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QP aims to drop emissions at its upstream facilities by at least 15%, as well as cut flaring intensity by over 75% by the end of
this decade. Additionally, by 2030, QP is attempting to abolish routine flaring, and by 2025, the Qatari energy producer would
like to minimise fugitive methane emissions along the gas value chain by establishing a methane intensity target of 0.2% over
all of its facilities. In certain supply contracts, QP is incorporating environmental considerations. In November 2020, QP signed
the first long-term deal with “specific environmental criteria and requirements”, which was designed to minimise the carbon
footprint of the LNG supplies with Singapore’s Pavilion Energy, and to provide 1.8 mta of LNG over a 10-year period.
In order to fulfil the objectives of decreasing GHG emissions, CCS is being used in Australia. Chevron, operator of 15.6 mta
Gorgon LNG offshore Western Australia, has injected more than 4M tonnes of CO2 in the CCS facility since its commissioning
in August 2019. Meanwhile, Novatek has embraced a long-term methane emissions reduction target in Russia. By 2030,
plans call for methane emissions to be reduced by 4% in the production, processing and LNG segments. Moreover, Novatek
aims to decrease GHG emissions per tonne of LNG produced by 5%. In this regard, Novatek and Baker Hughes, which
provides engineering and turbomachinery at Yamal LNG, signed an agreement to introduce hydrogen blends rather than solely
running methane from feed gas into the main process for natural gas liquefaction to reduce CO2 emissions from Novatek’s
LNG facilities.
Bio-LNG
Bio-LNG will have a significant role in the coming years to fuel heavy road and water transport in the Netherlands. The
construction of the first Dutch bio-LNG installation was launched in Amsterdam last November. Waste management company
Renewi, Nordsol (which processes the biogas into bio-LNG) and Shell (sales of bio-LNG at its LNG filling stations) have
developed this project. Biogas is made up of roughly 60% methane and 40% CO2. An additional CO2 cutback takes place due
to the recycling of the CO2 by-product in the market, which results in a 100% CO2 neutral fuel. Inpex, which is Japan’s biggest
oil and gas producer, has recently disclosed its strategy to become a CO2 net-zero company by 2050 by developing its
renewable and hydrogen energy together with the utilisation of carbon capture technologies. In October 2020, Japan set a
target to become carbon-neutral by 2050. Two major LNG importer regions, namely Asia-Pacific and Europe, have already
set policies regarding long-term decarbonisation targets. It is worth noting that most of the carbon-neutral LNG cargoes have
been supplied by companies in Asia to a certain extent, where carbon policies and investor pressure are fairly fragile. According
to the 2020 edition of the GECF Global Gas Outlook 2050, LNG imports to Asia are forecast to increase to about 800 bcm
(585 mta) by 2050, accounting for 71% of global LNG imports. As a result, the region will be the engine for global LNG demand
growth. As concerns with air quality rise in numerous Asian countries, the most realistic solution to attain a decarbonised
society and minimise the level of CO2 on a global scale, is the combination of natural gas and renewable energy. Emissions
and cleaner-burning fuels are going to be the centre of attention. Europe could be the predecessor for carbon-neutral LNG in
the long term, by sticking to its new methane strategy, which was revealed by the European Commission (EC), and in
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accordance with their 2050 carbon-neutral goal. Importantly, the EC suggested LNG producers engage with their international
partners to explore possible standards, targets, or incentives for energy supplies to the EU.
Source: GECF
Who pays for green LNG production?
An LNG seller will probably need to diminish and offset GHG, which emphasises the need for robust offset markets to be
completely carbon-neutral through the entire LNG value-chain. Accordingly, this highlights challenges for legacy LNG projects
with limited means to decrease carbon, making them dependant on expensive market mechanisms. LNG producers have to
keep the balance between the competitive fuel pricing and the expensive emissions reduction initiatives. Therefore, the question
of who pays the additional costs to produce green LNG is yet to be decided. As noted, the balance of carbon emissions is
feasible for any LNG facility and can lead to carbon-neutral LNG cargoes. However, this is probably not a sustainable long-
term process and does not directly cope with the project’s emissions. GECF proposes that both sellers and buyers contribute
to achieving emissions targets. The discussions with respect to these issues should involve all LNG industry players, such as
sellers, buyers, traders and policymakers. A more focused perspective that targets minimising emissions in upstream and
liquefaction might be more feasible for LNG producers. This will align with their ongoing efforts to reduce their carbon footprints
which are coming under increasing scrutiny from the public and investors. In conclusion, as LNG demand keeps expanding,
the demand for green LNG will grow as well. Green LNG can help ensure that natural gas continues its role as a crucial part
of the energy mix, supporting climate goals over the energy transition period. As stated in the 2019 Malabo Declaration at the
5th GECF Summit of Heads of State and Government in Equatorial Guinea, the GECF member countries reiterate the strategic
role of the development, deployment and transfer of advanced technologies for more effective production, and the utilisation of
natural gas to enhance its economic and environmental benefits. Source : www.rivieramm.com
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SINGAPORE’S FIRST LNG BUNKER VESSEL IS ‘SMART’
Singapore’s first LNG bunker vessel is the first in the world with ‘Smart’ notation, highlighting the drive for data-driven decision-
making regarding efficiency, maintenance and safety . While there are some two dozen LNG bunker barges and vessels in
operation globally, you will not find one ‘smarter’ than the recently delivered FueLNG Bellina. That’s because FueLNG Bellina is
the world’s first LNG bunker vessel (BV) to receive a ‘Smart’ notation. What makes FueLNG Bellina ‘Smart’ explains ABS
director, global gas solutions Aditya Aggarwal, is that it is “equipped with the necessary data infrastructure to allow remote
monitoring and real-time support of vessel operations. This infrastructure and the installed smart functions enable the leveraging
of operational data to improve vessel operations.” Operating out of the Port of Singapore – the country’s first LNGBV – FueLNG
Bellina is owned by FueLNG Pte Ltd, a joint venture between Shell Eastern Petroleum Pte Ltd and Keppel Offshore & Marine.
Based on an MTD 7500 design and built by the Keppel Nantong Shipyard in China, the LNGBV is fitted with Keppel O&M’s
AssetCare solutions, a remote vessel monitoring and analytics platform for condition-based maintenance and real-time support
of vessel operations. ABS was selected by FueLNG to class the vessel, which has notations for ‘Smart Infrastructure (Smart
INF)’ and ‘Crew Assistance and Augmentation (Smart CAA)’. Obtaining these notations form an integral part of the digital tools
tailored by AssetCare to support FueLNG in enabling remote monitoring and real-time support of vessel operations, and
predictive maintenance, which increases the vessel’s performance and efficiency. Digital innovation even extended to the
construction and commissioning of FueLNG Bellina. For example, smart glasses were used for remote inspection, which
increased the shipyard’s efficiency while improving workforce safety – a key consideration during the Covid-19 pandemic. With
the drive towards improved efficiency, maintenance and safety, Mr Aggarwal sees a growing need for onboard digital solutions
that provide deeper insight into operations. “Smart functions are becoming increasingly common onboard vessels and offshore
units and ABS is supporting a number of owners to successfully implement their asset-specific Smart strategy,” says Mr
Aggarwal. “ABS has supported delivery of a range of Smart asset and vessel projects, including jack-up rigs, container vessels
and a shuttle tanker. We see a steadily growing industry interest in smart notations,” he adds. In the case of FueLNG Bellina the
‘Smart (INF)’ notation recognises the vessel’s data communication and network infrastructure capabilities. Mr Aggarwal explains
that INF refers to ‘Data INFrastructure for Smart Function implementation’ and it focuses on the data handling capability. “The
inclusion of the Smart CAA within the Smart notation refers to automatic data collection, electronic logging, data processing,
analysis, and report generation capability of the onboard system, to provide Crew Assistance and Augmentation,” he says.
Keppel O&M managing director, newbuilds Tan Leong Peng, says AssetCare shows Keppel’s commitment to “leverage smart
functions and technologies to continue creating value for our customers.”Adds FueLNG general manager Saunak Rai, FueLNG
Bellina’s “digital tools, such as AssetCare, not only improve vessel performance and maintenance, but also enable the end-
to-end digitalisation of the bunkering process which enhances efficiency, reliability, and convenience for customers.”
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Smart and manoeuvrable
Besides its smart functionality, FueLNG Bellina is designed to efficiently refuel a wide range of vessels calling at the Port of
Singapore. Highly manoeuvrable, the LNGBV is fitted with two stern azimuth thrusters and one bow thruster that allow it to
perform ‘crabbing manoeuvres’ during bunkering operations, minimising tug utilisation and in turn reducing fuel consumption
and emissions. With a filling rate of between 100 and 1,000 m3 of LNG per hour, the LNGBV can refuel various types of
vessels at heights ranging from 3 m to 23 m above the water level. This flexibility is essential in one of the world’s busiest
bunkering hubs. With dual-fuel propulsion, FueLNG Bellina utilises boil-off gas (BOG) as fuel for power generation and
propulsion, reducing CO2, particulate matter and NOx emissions. Awarded the LNG bunker supplier license by the Maritime
and Port Authority of Singapore (MPA) in 2016, FueLNG plans to supply LNG fuel from Singapore’s first dedicated LNG
bunkering facility, constructed by Keppel O&M on its Floating Living Lab (FLL). Shell will supply the LNG to the 3,500-
m3 capacity facility when it becomes operational in Q4 2021. Besides current LNG bunker licensees FueLNG and Pavilion
Energy Singapore, the MPA could award additional licenses in February under a request for proposals (RFP) it launched in
October 2020. Proposals must contain an end-to-end LNG bunkering solution, detailing both the LNG supply and delivery
model and marketing plan for the sale of LNG fuel. One of those responding to the RFP was Greece’s Probunkers. “Our
submission request for an LNG bunkering license for the Port of Singapore supports our quest to become the first independent
global LNG bunker supplier,” said Probunkers chief executive Alexander Prokopakis. “The LNG-fuelled fleet is growing, and
we see an increasing interest from charterers and shipowners for LNG as a fuel.”
First bunker vessel in Southeast Asia

Increasing LNG bunkering infrastructure at other ports in Asia underpins the use of LNG fuel in long-haul service. On its
maiden voyage, Altera Infrastructure’s dual-fuel shuttle tanker Altera Wave was bunkered by Southeast Asia’s first LNG supply
vessel, Avenir Advantage. Operating under a three-year charter by Petronas LNG Sdn Bhd, Avenir Advantage supplies LNG
to fuel ships operating in Malaysia, while also delivering cargoes directly to small-scale customers in the region. Following its
maiden voyage from China in October, Avenir Advantage completed the commissioning of the LNG re-loading equipment on
the FSU Tenaga Satu and bunkered the dual-fuel pure car truck carrier SIEM Aristotle. Built by Keppel Offshore & Marine’s
Nantong Shipyard, Jiangsu Province, China, the Malaysian-flagged Avenir Advantage and Avenir Accolade are dual-fuel (MGO
and LNG) vessels, each with an overall length of 123.44 m, beam of 18.6 m and draught of 5.65 m, with two IMO Type C
tanks with a total cargo capacity of 7,500 m3. Propulsion is supplied by a single screw, with power delivered by a Wärtsilä
6L34DF main engine, rated at 2,700 kW at 750 rpm. Avenir LNG has four other LNGBVs – two 7,500-m3 and two 20,000-
m3 capacity vessels – in various states of construction at China’s CIMC Sinopacific Offshore & Engineering (CIMC SOE). Avenir
is spending US$111.8M to build the recently launched Avenir Allegiance – currently the world’s largest LNGBV at 20,000 m3 –
and its sister vessel, Avenir Advantage. Source : www.rivieramm.com
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THREE TIME CHARTERS TIGHTEN AVAILABILITY OF HÖEGH LNG’S
FLEET
A series of time charter agreements will provide full contract coverage for all of Höegh LNG’s fleet except for one vessel for
2021, reported the Oslo-listed company. Höegh LNG has inked a deal with Singapore-based commodity trader Trafigura to
extend the existing interim time charter for Höegh Gannet by 12 months, and entered into a new interim time charter for Höegh
Gallant for 12 months from the redelivery from its current charter at the end of March 2021. In addition, an agreement has
been reached with US LNG producer Cheniere to extend the existing interim time charter for Höegh Galleon by 12 months.
Höegh LNG president and chief executive Sveinung JS Støhle said “We are off to a very good start for 2021 with these charters
in place, taking advantage of the seasonally strong LNG carrier market to bridge the interim period with solid counterparties.”
While the rates were not disclosed, Höegh LNG said the “above-mentioned time charters are consistent with the term market
rates for tri-fuel, diesel-electric LNG carriers and modestly above those achieved for Höegh Gallant and Höegh Gannet in
2020. The three time charters include extension options for the charterers which can result in back-to-back employment with
potential new floating storage and regasification unit (FSRU) awards.” Höegh LNG’s fleet has secured full contract coverage
for 2021, with the exception of Höegh Esperanza which is deployed under an existing charter that expires in June 2021. Höegh
LNG aims to secure an extension that potentially covers the period until Höegh Esperanza is planned to be employed on a
long-term FSRU contract. Condition on a positive FID, Höegh Esperanza would be deployed as an FSRU for AGL’s Crib Point
FSRU project in Australia. Source : www.rivieramm.com
MOL NAMES NEW LNGC FOR INDIA'S GAIL

Japanese shipping company Mitsui OSK Lines (MOL) on February 9 named an LNG carrier that will be chartered to India’s
Gail, it said on February 10.The Gail Bhuwan vessel will carry LNG from the US to India. Gail has contracts for procuring LNG
from the US under two long term sales and purchase agreements. The Indian state-owned company holds an LNG portfolio
of about 14mn metric tons/year from various long and short-term contracts.The vessel has a 298-m length and a cargo tank
capacity of 180,000 m3 . It was built by Daewoo Shipbuilding & Marine Engineering and is managed by MOL LNG Transport
Asia.MOL is also taking part in other projects in India, including a floating LNG receiving terminal and ethane transportation.
Source : www.naturalworldgas.com
CHARTER AGREED FOR INDIA’S FIRST FSRU IMPORT TERMINAL

Oslo-listed Höegh LNG Holdings has inked a charter agreement with H-Energy for the first floating storage and regasification
unit (FSRU) operating in India. Plans call for the deployment of the FSRU Höegh Giant under the agreement, which is for 10
years with annual termination options after year five. FSRU Höegh Giant is currently completing its LNG carrier charter with
Naturgy, and will then proceed directly to Singapore’s Keppel Shipyard for minor modifications in addition to precompletion of
the vessel’s five-year periodic class survey, originally scheduled for 2022, as this will improve efficiency and reduce costs.
The vessel is expected to be off-hire for approximately 40 days in Q1 2021 before the start-up under the H-Energy contract
in March 2021. Once in service, Höegh Giant will deliver natural gas to the 56-km Jaigarh-Dabhol pipeline connecting the
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LNG import terminal to the national gas grid and will also deliver LNG for onshore distribution through LNG truck loading
facilities, as well as reloading LNG onto small-scale LNG vessels for downstream distribution or LNG bunker services. The H-
Energy/HLNG FSRU terminal will allow for coal consumption to be replaced with natural gas at a scale which reduces
CO2 emissions by up to approximately 120M tonnes, NOx emissions by approximately 97% and SOx emissions by approximately
99% over the 10-year period, based on annual imports of 3 mta of LNG, according to GIIGNL. Höegh LNG president and chief
executive Sveinung Støhle said, "We are delighted to have completed the agreements with H-Energy for the first FSRU LNG
import terminal in India, in particular given the strong ESG profile of this project which is in line with Höegh LNG’s vision to
provide our customers with the infrastructure to access clean and affordable energy.” Added Mr Støhle, “A roadmap with H-
Energy also includes the joint development of the downstream small-scale LNG market in the region, using the FSRU as the
terminal for storage and reloading to smaller vessels. India is a high-growth market and we see clear potential for Höegh LNG
to provide additional FSRUs and clean energy solutions to this market over the coming years." Source : www.rivieramm.com
NYK ORDERS FOUR LNG-FUELLED PCTCS

Japanese shipping company NYK has concluded a shipbuilding contract with China Merchants Jinling Shipyard (Nanjing) for
four LNG-fuelled pure car, truck carriers (PCTCs), it said on February 12.These four vessels will be delivered from 2022 to
2023 and are planned to be assigned to transport vehicles mainly to and from Europe as well as the Middle East.
On these vessels, WinGD’s X-DF2.0 iCER (intelligent control by exhaust recycling) main engine will be utilised for the first
time in the world, NYK said. This engine consumes less gas and reduces GHG by cutting methane emissions from exhaust
gas by approximately 50%. Further, the vessels will be equipped with battery hybrid technology, which will improve fuel
efficiency by mitigating main engine and electrical generator load fluctuations through the support of batteries. “The use of LNG
fuel, together with these new technologies and other developments such as hull modification, will contribute to a reduction of
sulfur oxide emissions by 99% compared to ships fueled by heavy fuel oil,” NYK said. “Likewise, nitrogen oxide emissions will
be cut by 96%, and CO2 emissions by approximately 40% or more (per unit of transportation).”
NYK plans to replace its current vessels with around 40 newly built LNG-fueled PCTCs over the next decade to achieve its
environment management target. Source : www.naturalworldgas.com
EU TARGETS TWO-THIRDS RENEWABLE GAS BY 2050

The European Commission (EC) is consulting on changes to European Union (EU) gas law to expand the share of renewable
and low-carbon gases to two-thirds of the gaseous fuel mix by 2050, it said in a document on February 11. This would reduce
the need for imports as the region becomes more self-sufficient over time. The EC is working on a policy to support a
"progressive phase-out" of unabated natural gas and its "gradual replacement" with biogas, bio-methane, renewable and
decarbonised hydrogen, as well as synthetic methane. The remaining third of natural gas would be abated using carbon
capture, use and storage (CCUS) technology. "The reforms should enable fair competition between smart electrification, energy
efficiency, and renewable and low-carbon gases like hydrogen and bio-methane, or CCUS technologies in achieving
10
decarbonisation targets," the EC said. The consultation will continue in March 10, ahead of the EC making a proposal for
decarbonising gas and hydrogen markets by the end of June. Under discussion are changes to the EU's 2009 gas legislation.
The existing directive, regulations and codes may restrict the development of renewable and low-carbon gases, the EC notes.
Natural gas accounts for 95% of gaseous fuels used in the EU, not only as an energy carrier but also as a key feedstock in
industry processes. Gas also serves a vital role as a source of baseload power generation for a system that relies increasingly
on fluctuating renewable energy supply.According to the EC, gaseous fuels account for roughly 22% of the EU's total energy
consumption today, including around 20% of electricity generation and 39% of heat production. The EC expects the share to
remain about 20% in three decades' time. A rise in demand for renewable and low-carbon gases could lead to a "crowding
out" of imported natural gas, unless suppliers adapt by supplying more renewable and low-carbon gases of their own, the EC
said. Otherwise, EU consumption will increasingly be met by domestic production. Through legislative changes, the EU wants
to encourage the repurposing of existing gas pipelines for renewable and low-carbon gases. It also wants new rules in place
to prevent non-regulated monopolies from blocking new players from entering the hydrogen market, and for a decision to be
taken on whether gas transmission system operators can operate electrolysers. The EC's landmark hydrogen
strategy, published last summer, envisages the development of 40 GW of electrolyser capacity by 2030. The EC wants to
create a more decentralised system for gas injection, as the current rules mean "the tradability and access of renewable and
low-carbon gases to markets and the grid are not on a level playing field with fossil natural gas." LNG terminals should also
be made fit to receive renewable and low-carbon gases, granting access in a transparent way. Source : www.naturalgasworld.com
PETRONAS, JERA SIGN MOU

Malaysia’s Petronas and Japan’s Jera entered into a memorandum of understanding (MoU) to collaborate on low-carbon energy
initiatives, covering LNG, ammonia and hydrogen, the Malaysian company said on February 9. The companies will enhance
collaboration in the supply chains for ammonia and hydrogen fuels while continuing to advocate for the use of LNG, Petronas
said. “This builds upon Petronas’ position as one of the world’s largest LNG producers, experience as a reliable producer of
ammonia as well as the establishment of the company’s hydrogen business in November 2020,” it said. Petronas said it is
already producing blue hydrogen as a by-product from its facilities and will be exploring the commercial production of green
hydrogen in the near future. Also, in the LNG space, Petronas and Jera will be collaborating to grow the use of natural gas
as marine fuel through LNG bunkering solutions. They will explore the establishment of a global bunkering supply network,
leveraging on both companies’ experience in LNG bunkering.Petronas completed its maiden LNG bunkering operation
in November last year at Pasir Gudang, whereas Jera had completed its first LNG bunkering operation in Japan
in October 2020. Source : www.naturalgasworld.com
11
TOTAL INKS PAPUA LNG FISCAL PACT
France’s Total and joint venture partners ExxonMobil and Oil Search have signed a fiscal stability agreement with the
government of Papua New Guinea for the Papua LNG project, Oil Search said on February 10. The fiscal stability agreement
is the final step envisioned under the Papua LNG gas agreement to guarantee Papua LNG fiscal stability, the company said.
It follows the amendments to acts passed by the PNG parliament in November 2020. “We are pleased to see further progress
achieved on Papua LNG. This milestone highlights the commitment from the PNG government towards Papua LNG and is a
significant step in derisking the project,” Keiran Wulff, Oil Search’s managing director, said. “It also demonstrates increasing
alignment between the PNG government and the joint venture partners” Oil Search, ExxonMobil and France's Total had planned
to develop the proposed Papua LNG project and expand the existing PNG LNG plant in tandem. The expansion of PNG LNG
plant capacity is dependent on the P’nyang gas agreement, which is yet to be concluded. Total has now decided to take the
Papua LNG project forward fed by the Elk-Antelope gas fields. The Papua LNG project of 5.4mn metric tons/year capacity
will consist of two trains of 2.7mn mt/yr capacity each.
Change At ExxonMobil LNG

ExxonMobil's former managing director of ExxonMobil Papua New Guinea (PNG) Andrew Barry took over the reins from Alex
Volkov at the US major's global LNG marketing team in January. Volkov joins the company's Integrated Solutions group as
commercial vice president. Barry's place in Port Moresby will be taken by Peter Larden, from the company's Canada office.Barry
said he would "use my experiences in LNG to build on ways to increase our competitiveness, develop new ways to serve the
needs of our customers, and continue to supply the world with the energy we all need.” As managing director of the LNG plant
in New Guinea for six years, Barry brought the project from development to production, avoiding the missed deadlines and
budgets that had plagued other projects, most notably off Australia. Barry said the company's LNG portfolio "is well positioned
to support the dual energy challenge of delivering energy whilst reducing environmental impact.” Source : www.naturalgasworld.com
NEW FORTRESS DIVES INTO BRAZIL

To take advantage of the promising LNG market in Brazil, the US-based energy company New Fortress Energy (NFE) has
made a big move into Latin America's largest oil and gas producing country: Brazil. The company, with worldwide energy
infrastructure operations, bought Hygo Energy Transition in a $5bn deal announced mid-January. Hygo is a joint-venture
between Golar LNG and Stonepeak Infrastructure Partners. With the purchase, NFE will acquire an operating floating storage
and regasification unit (FSRU) terminal and a 50% interest in a 1.5-GW power plant in Sergipe as well as two other FSRU
terminals with 1.2 GW of power in advanced stages in the South America country, according to the NFE official statement.
Hygo's fleet consists of a newbuild FSRU and two operating LNG carriers. NFE will also own a leading owner of FSRUs and
LNG carriers as well as a pioneer in floating liquefaction technologies with the GMLP transaction. The addition of Golar LNG
Partners LP (GMLP)'s fleet of six FSRUs, four LNG carriers and a 50% interest in Trains 1 and 2 of the Hilli, a floating
liquefaction vessel, is expected to support both NFE's existing facilities and its international pipeline projects. "With a strong
12
presence in Brazil and a world-class LNG shipping business, Hygo and GMLP are excellent additions to our efforts to accelerate
the world's energy transition," said NFE CEO Wes Edens. "The addition of Hygo will quickly expand our footprint in South
America with three gas-to-power projects in Brazil's large and fast-growing market. With GMLP, we gain LNG ships and
world-class operators that are an ideal fit to support our existing terminals and robust pipeline." Golar LNG chairman Tor Olav
Troim agreed with the NFE CEO. "We are impressed with what Wes Edens and the NFE team have created and their
commitment to changing the energy industry," Troim said. "They share our vision to provide cheaper and cleaner energy to a
growing population. The consolidation of two of the entrepreneurial LNG downstream players gives the company improved
access to capital and creates a unique world-leading energy transition company which Golar shareholders will benefit from
being a part of going forward." Along with the purchase of Golar Power, NEF also announced agreements with BR Distribuidora
and the acquisition of the project for the LNG terminal at the Port of Suape, in Pernambuco, a Brazilian state located in the
northeast region of the country. With the deal, NEF will land in Brazil with four LNG terminals: two in the northeast, one in
the north and one in the south of the country; and 4.1 GW of thermoelectric power in gas plants. Following the Golar Power
strategy, the intention is also to operate in the commercialization of LNG. In the announcement of the purchase, NEF mentions
the possibility of supplying the entire northeast region.
Opportunities ahead
NEF's foray into the LNG market can be supported by substantial interest in new LNG regasification terminals in Brazil, which
is reflected in the many projects that have been announced and are in various phases of planning. According to Prysma E&T
Consultores director Sylvie D'Apote, most regasification projects are linked to a power project: the power plant is the anchor,
while other markets are an upside to be conquered gradually, as gas demand from other sectors is generally low in Brazil.
"So opportunities and challenges for new LNG projects are related to opportunities and challenges in the Brazilian power
sector," she said. Brazil’s needs for energy are growing. D'Apote explains that LNG plays an important role in the country's
gas supply as it provides flexibility and security of supply, in particular to the power sector. "The (Brazilian) government is
pushing forward a comprehensive gas reform aimed at attracting new players, increasing supply competition, which hopefully
will reduce prices and increase demand," she said. LNG imports started in late 2009 and are an important component of the
country's gas supply. "Given that in Brazil, gas-fired power plants are used as a backup for the hydropower plants, gas
demand from power plants is highly variable from month to month and from year to year," the consultant said. "LNG is used
to supplying peak demand from power plants. Even with the substantial growth in domestic gas production, related to the
presalt development, the need for LNG as a flexible gas source will continue, because presalt gas is associated gas, therefore
not at all flexible." she added. Companies like NFE who are interested in selling LNG in Brazil or building regasification
terminals need to understand the workings of the power auctions for new capacity and how much power demand will recover
in the next few years, as this will determine how much new power generation capacity will be needed. In particular they face
strong competition from alternatives, such as wind and solar, whose costs are very low. "Aside from the LNG-to-power market,
13
there is also a substantial interest in LNG as a means to transport and distribute natural gas to areas not yet supplied by
pipelines. This is a promising market, but of course the volume is a lot smaller than in the LNG-to-power market, and the
complexities – logistics and the commercial risks – are a lot larger,” she said. According to Brazil's state-run energy research
office EPE, the South America country may raise roughly $9bn in investments in the gas market from 2020 to 2029. The
LNG market may see $200mn invested in regasification terminals by 2029. With that amount of investment, the LNG supply
in Brazil could rise 40% by 2030, reaching 1.75mn m³/day.
Petrobras' role
Another point is the role played by state-run oil company Petrobras in the LNG market. "Petrobras used to be the only importer
of LNG in Brazil, as well as a major player in all stages of the natural gas value chain. This is changing,” D’Apote said. There
are now two regasification terminals owned by independent companies and several more are at an advanced planning stage.
Petrobras is also committed to giving access to its regasification terminal to third parties and is seeking to lease out its Bahia
terminal [in the country's northeast]. I think that in five years we will have a very different gas market in Brazil and many more
players," she said.Petrobras is refocusing its activities and investments on its core business, which is high-yield oil fields in
the pre-salt, and selling its assets in non-core areas, such as natural gas and refining. "This means that the business
environment for natural gas and for LNG is very attractive at the moment and we are seeing a lot of interest from foreign
investors and local companies," she said. Source : www.naturalgasworld.com
LNG BOOSTS UK GAS SUPPLY

The northwest European cold spell has driven prices up at the Dutch and UK hubs, and more LNG is flowing into the UK grid
and less pipeline gas from the continent, according to instantaneous flow data published by UK National Grid February 8 and
9. There were three LNG import terminals flowing at time of press: two at Milford Haven and one at the Isle of Grain.
Collectively they were delivering 100mn m³/d, based on current data, which is subject to change over the gas day which ends
at 05.59.There was a similar cold spell in January but then there was sufficient gas on the continent for there to be some
pipeline exports to the UK. The past few days however have seen gas flow out of the UK through Interconnector UK, in
response to higher prices in mainland Europe. National Grid told NGW late February 8: "The interesting feature of supply today
is that we are not receiving any gas through IUK which is quite different to January when they were flowing quite hard. This
is probably linked to the very cold temperatures in Europe. Isle of Grain supplies have increased to compensate so actually
the pattern of supply is not that different." National Grid told NGW that daily flows exceeded 400mn m³ also in January and
those might have been the highest for a decade. Most of the demand has been for local distribution zones, although gas was
flowing at a rate of 80mn m³/d to power stations February 8-9. However, that is the instantaneous rate, which falls at night-
time. This was lower than in January, when lower renewable energy was generated owing to less wind. Total demand was
450mn m³, of which: local distribution zones, 330 mn m³; power stations, 89mn m³; industry 9mn m³ and exports through
14
IUK 22mn m³.At time of press (11.30 GMT) gas was meeting 45.6% of UK power generation mix and coal another 6.2%, so
fossil fuels accounted for just over half. Wind was at about 17% of the mix. Demand was 45 GW.Day-ahead prices at the UK
hub, the National Balancing Point, closed February 8 at 57.5 pence/therm (p/th) ($7.94/mn Btu), compared with 47.35
pence/therm February 3. Then it was also possible to buy gas for delivery this week (February 8-12) for just 49.7 p/th, using
the closing price as a guide. The March contract has also gone up, but not so much: from 47 p/th to 51.8 p/th. Source :
www.naturalgasworld.com
RIVALS BID FOR NEW CALEDONIA IMPORT PLAN

A second floating storage and regasification unit-based LNG import project has been launched for the French island dependency
of New Caledonia — throwing up questions as to whether a first and now rival development will go ahead. TradeWinds has
learned that French energy company Engie has launched a request for quotations for a project to supply LNG to a planned
import facility in the Bay of Prony, to the south-east of a planned rival project in Noumea. Engie operates a coal-fired power
station there, that supplies a local nickel plant, but it wants to switch to gas. The company has asked for offers on an
engineering procurement and construction job for the power plant, LNG supply and an FSRU supplier that would lease and
operate the unit. Those following the business said the tender is wide ranging, with Engie requesting an FSRU with capacity
of between 125,000 cbm and 170,000 cbm.Shipowners Golar LNG, Exmar, Hoegh LNG and Mitsui OSK Lines have been
mentioned as potentially in the mix for the business.The launch of the Prony project overlaps with closure of bidding for a first
FSRU-based import project for New Caledonia at Noumea. Nouvelle-Caledonie Energie (NCE) — which handles the state’s
energy requirements and those of Societe Le Nickel — closed bidding at the end of January for the design, build and operating
job on the Noumea development for a gas-fired power-generation facility. Around five consortia are understood to have
submitted offers to supply a floating power plant or a gravity-based structure for these imports. But those following the business
for New Caledonia said Engie appears keen to kill off the NCE-backed Noumea project in favour of its own development for
Prony.The Prony project became mired in politics after Trafigura moved to buy the Goro nickel plant last year. A fierce debate
is raging in the island territory over the future of domestic nickel mining and smelting and the proposed sale is strongly opposed
by New Caledonia’s pro-independence movement. Last week, New Caledonia’s multi-party government collapsed after pro-
independence politicians resigned, citing persistent economic issues and unrest over the sale of nickel assets. source :
www.tradewindsnews.com
SANCTION INCHES QATAR’S HUGE NEWBUILD PROGRAMME

CLOSER
But shipbuilders are not holding their breath for order avalanche in 2021. Shipowners and yards are waiting to learn if Qatar
Petroleum’s final investment decision (FID) on its $28.75bn North Field Expansion (NFE) project will reignite action on its huge
LNG carrier newbuilding programme. Shipbuilding sources said there had been some exchange of technical details in late
2020 but there have been no recent updates on a newbuilding schedule. One source said yards have an expectation on the
number of berths that might be firmed up this year. However, these amount to 10 vessels or fewer each, and guidance from
15
the producer is still awaited. Owners reported similar radio silence, although there was an -indication last year that Qatar
Petroleum was making a closer assessment of those companies with which it had not previously worked. Qatar Petroleum
signed deeds of agreement reservations last year with South Korea’s big three shipbuilders — Daewoo Shipbuilding & Marine
Engineering, Hyundai Heavy Industries and Samsung Heavy Industries — and China’s Hudong-Zhonghua Shipbuilding (Group).
Including options, Qatar Petroleum locked away up to 151 slots for newbuildings priced at about $180m each that can deliver
from 2023 through into 2026. According to initial schedules, it planned to ink its first vessels with yards in late 2020. But
these failed to materialise. With the new liquefaction plans being green-lighted this week and production scheduled to start in
2025, those working closely with the project said the shipping requirement for these volumes would now probably be progressed
this year. The long-awaited sanction of NFE is a milestone for the world’s largest LNG producer and the wider sector, which
recorded just one FID for a liquefaction project in Covid--hit 2020. It also ranks as the largest LNG capacity to be sanctioned.
NFE will raise Qatar’s LNG production to 110 million tonnes per annum from 77 mtpa. Aside from LNG, it will produce
condensate, LPG, ethane, sulphur and helium, which may lead to other shipping requirements. The FID was announced in
conjunction with the signing of the project’s key onshore engineering, procurement and construction contract with Chiyoda and
Technip. The expansion will comprise four trains of 8m tonnes capacity each. It will also be built with -several factors designed
to reduce its environmental footprint, including a CO2 capture and sequestration scheme and a “jetty boil-off gas” recovery
system. In a planned second phase — the North Field South Project — Qatar aims to boost its LNG production to 126 mtpa
from 2027 with two additional trains. Energy minister Saad al-Kaabi, who is chief executive of Qatar Petroleum, said he is
looking at further expansions beyond this. source : www.tradewindsnews.com
WESSELS MARINE LINES UP FOUR-SHIP LNG BUNKER SHIP

ORDER
Christian Hoepfner explains the concept and reasoning behind a new multi-fuel unit. Partners of Germany’s Wessels Marine
(Wesmar) plan to sign a four-ship order in the second quarter for a new breed of multi-fuel bunker vessels (MFBVs), aimed
initially at the LNG sector. Managing partner Christian Hoepfner said Wesmar has completed the designs for ships, which can
be built as 3,800-cbm, single-tank vessels or 5,000-cbm, two-tank versions, and is tweaking these to suit charterers'
requirements. He declined to name Wesmar's financial and ship-management partners but said he expects them to move
forward with two vessels of each size initially and extend the fleet with a further four ships.
Future fuels
Hamburg-based marine consultancy and project-development company Wesmar — a two-year-old start-up focused on
alternative fuels that facilitate energy transition — will provide the design, concept development and knowledge for the
newbuildings to position them into the markets. Hoepfner said Wesmar is investigating public-funding opportunities from the
European Union and individual governments. The vessels will be built ready for ammonia and methanol, so their fuel-handling
systems could be retrofitted to use either as these become available, with methanol an option for early adoption in regional
16
markets. Their cargo tanks will be constructed of stainless steel to accommodate ammonia. Hoepfner said the company has
not yet identified a shipyard to build the vessels but it is expected to be one with LNG newbuilding experience — either in
bunkering or cargo carrying — in Europe, possibly in Germany. The Wesmar-designed newbuilding, which would be chartered
out on a long-term basis, would be delivered in 2023 to dovetail with when potential charterers are expecting to see quite a
sharp increase in the demand for LNG as a fuel.
Cost conscious
Hoepfner is upfront on pricing. He cited a 5,000-cbm LNG bunker vessel (LNGBV) contracted at a Spanish yard by Norway's
Knutsen OAS Shipping that was priced at about €35m ($41m). He said Wesmar would expect a price “far below” that for its
3,800-cbm vessel, with the 5,000-cbm design coming in at similar figure to that achieved in Spain. But he added that total
time-charter costs for the 3,800-cbm MFBV would be around €2.3m per year less than those paid for a 7,500-cbm LNGBV.
“Although they operate in the same market, the costs for our vessel type are significantly lower, which enables the operator to
charge a lower logistic margin and have a better delivered price for the customers," he said.
Charterers' concerns
Wesmar has talked to a wide range of charterers, including end users of LNG to understand their needs. Hoepfner cited a
pontoon that had to be specially designed for Carnival’s LNG-fuelled cruiseships after it was found that the overhanging
lifeboats prevented the LNGBV built to serve them from gaining access to the vessels — an addition that he said charterers
found “annoying”.He said among key concerns of charterers is whether they have enough throughput to keep an LNGBV
occupied. Charterers are also keen to hold down costs so they can offer a competitive price for delivered LNG.He also
highlighted the operational capabilities needed for vessels, including aspects such as their compatibility with the ships they are
supplying and the position of manifold of the receiving vessels and gas-handling equipment.Reducing cargo boil-off gas is
another factor and, as a result of discussions on this, he said Wesmar had opted to install a chiller unit on its newbuildings.
Small is beautiful
“We want to make LNG available everywhere it is needed,” Hoepfner said. It is now available in the main ports but he said
there are many vessels in inter-regional trades that are ideal users for LNG and bio-LNG.He anticipates the newbuildings
could also be used for sole transportation of bio-LNG or synthetic LNG as an additive to bunker volumes to reduce emissions.
Wesmar estimates the most frequently bunkered parcel size of LNG will be in the 250-cbm to 1,000-cbm range. But Hoepfner
says operators of existing LNGBVs, such as the 18,600-cbm and 7,500-cbm ships, are not keen to serve bunker volumes of
500 cbm or less, especially if they have to sail longer distances to do it. “Those vessels are not made for smaller clients,”
he said. He believes the smaller size range for LNGBV is unrepresented. “The [LNG] bunker infrastructure needs more
vessels and needs smaller vessels,” he said. source : www.tradewindsnews.com
17
CHARTERER INTEREST FUELS LNGBV NEWBUILD ENQUIRY.
Interest in LNG bunker vessel (LNGBV) newbuildings is rising on the back of increased enquiries from potential charterers, as
more LNG-fuelled vessel projects progress towards firm orders. Data from the Society for Gas as a Marine Fuel (SGMF)
shows there are 21 LNGBVs in operation and a similar number on order, with 14 scheduled to go into operation this year.
SGMF lists projects for at least 18 vessels as “under discussion”, although brokers hint that there are more in the works. In a
new report, shipping industry coalition SEA-LNG said LNG-fuelled vessels total about 13% of the current newbuilding
orderbook.SEA-LNG cited statistics from shipbroker Clarksons that list 124 ports as offering LNG-bunkering facilities, with a
projection that this will increase to 170 by 2022.Clarksons also projects the LNG-bunkering fleet will double in size in the next
two years, the group said.Brokers working on LNG bunker newbuilding projects caution that the pricing for the niche vessels
is not falling.Instead, they said companies are trying to reduce specifications on small-scale ships that would limit them to
functioning as pure bunkering units, rather than doubling up as trading vessels, in an effort to reduce costs. Multi-year charters
are required to back investment in these newbuildings if this sector is to develop, one broker said. While the energy majors,
particularly Shell and Total, have taken the lead in developing LNG bunkering infrastructure worldwide, brokers now speak
about a raft of new enquiries from global players. One broker cited three potential clients for LNGBVs in North America, with
two each in Asia and the Mediterranean and another in the Middle East. Total and Shell are believed to need more vessels
to fill gaps in their global supply ambitions. In December, Shell, which at the time had six LNGBVs in operation, said it expects
to more than double the number of vessels it will be using by 2025. An unnamed Japanese entity is also flagged up as a
likely new entrant. North-west Europe is considered “quite well covered” by some players in this sector. But more, particularly
smaller capacity vessels, are expected to be slotted into the mix here.
LNG bunker vessels in operation: 21
LNG bunker vessels on order: 20
Projects for LNG vessels under discussion: 18
LNG-fuelled ships in operation: 193
LNG-fuelled ships on order: 238
Source: SGMF, www.tradewindsnews.com
DISCLAIMER: The news, opinions, reports, updates and data or views contained on the Reports page may not represent the opinions or views of CYGNUS ENERGY, ITS OWNERS, ITS employees or its agents or affiliates. CYGNUS ENERGY makes no representation, warranty or guarantee as to
the accuracy or completeness of the information contained in any News, Research, Analysis or Opinion provided by this service. the information has been taken and credited and cited to the sources as per the citation given in the report/newsletter herein. Under no circumstances will CYGNUS
ENERGY, its owners, employees, gents or affiliates be held liable by any person or entity or institution or company for decisions made or actions taken by any person or entity that relies upon the information provided here. While every care has been taken to ensure that the information in this
publication is accurate, CYGNUS ENERGY, can accept no responsibility for any errors or omissions or any consequences arising therefrom. Figures are based on latest available information, which is subject to subsequent revision and correction. The views expressed are those of CYGNUS ENERGY
and do not necessarily reflect the views of any other associated company. NEWS AND SOURCE: LNGWORLDNEWS, LNG INDUSTRY, THE HINDU BUSINESS, ARGUS MEDIA, PETROWATCH, REUTERS, IGU LNG REPORT 2018, TRADEWINDS, MONEYCONTROL
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Qatar Petroleum Signs Deal for Mega-LNG Expansion

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LNG NEWS WEEKLY DATE 12th FEBRUARY 2021

QATAR PETROLEUM SIGNS DEAL FOR MEGA-LNG EXPANSION

SHELL GOBBLES UP LOW-EMISSIONS LNG NEWBUILDINGS IN LONG-

Another Shell charter

FSRU for gas-to-power project

SHELL EYES LNG EXPANSION

CARBON NEUTRAL OR ‘GREEN’ LNG: A PATHWAY TO THE ENERGY

Carbon-neutral or ‘green’ LNG

Applying a combination of strategies

First bunker vessel in Southeast Asia

MOL NAMES NEW LNGC FOR INDIA'S GAIL

CHARTER AGREED FOR INDIA’S FIRST FSRU IMPORT TERMINAL

NYK ORDERS FOUR LNG-FUELLED PCTCS

EU TARGETS TWO-THIRDS RENEWABLE GAS BY 2050

PETRONAS, JERA SIGN MOU

Change At ExxonMobil LNG

NEW FORTRESS DIVES INTO BRAZIL

LNG BOOSTS UK GAS SUPPLY

RIVALS BID FOR NEW CALEDONIA IMPORT PLAN

SANCTION INCHES QATAR’S HUGE NEWBUILD PROGRAMME

WESSELS MARINE LINES UP FOUR-SHIP LNG BUNKER SHIP

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