LNG NEWS WEEKLY DATE 03rd SEPTEMBER 2021

ADNOC L&S POSTPONES LNG NEWBUILDING TENDER AS YARD PRICES RISE

Price gap between shipowner's expectations and yard quotes widens as slots fill. Shipowner Adnoc Logistics & Services (Adnoc
L&S) has pressed pause on its tender for LNG carrier newbuildings as prices at shipyards rise and the availability of berth
slots is pushed further out. Sources following the exercise said the company has opted to put its tender for five LNG
newbuildings on ice until next year. Adnoc L&S, the shipping arm of energy firm Abu Dhabi National Oil Co (Adnoc), kicked
off its hunt for vessels in the first quarter of 2021 as it moved to tackle its LNG fleet-renewal requirements. Newbuilding
sources said five shipyards were approached, and the Abu Dhabi-based owner countered their initial offers with a price of
$180m per ship. They said the company had the expectation of contracting vessels at around the $185m mark. But shipyard
prices were already firming and the steel price hikes seen in the second quarter only accelerated this trend. One South Korean
broker said the price for a standard LNG carrier newbuilding is now in the range of $205m to $210m, with yards quoting even
higher levels and additional design specifications adding to costs.

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(Sale and Purchase) (Gas projects)
Berth crush
While some 2024 delivery berth slots may still be available, brokers detailed that the crush of containership enquiries is not
showing any signs of slowing, as yet, with companies such as Ocean Network Express and Wan Hai Lines lining up for more
tonnage. There is also talk of more speculative LNG carrier enquiries, and Qatar is expected to ink the first in its huge haul
of LNG newbuildings before the end of the year. Brokers said the attention is now turning to open berths for delivery dates in
2025 as the earlier slots vanish. Adnoc L&S has been seeking offers from shipbuilders on four firm vessels of 174,000 cbm
and an optional ship. The company is said to be looking for delivery dates from the fourth quarter of 2024 and the first three
months of 2025. The tender process for the LNG newbuildings had been due to be completed by May 2021. Parent Adnoc
has a long history in LNG. The company was one of the first large exporters, shipping its cargoes to Japanese buyers under
long-term contracts. In the mid-1990s, a fleet of eight Moss-type, steam turbine LNG carriers were built in Japan and Finland
to lift the emirate’s exports.

ADNOC L&S'S LNG FLEET

Vessel Capacity (cbm) Built

Al Khaznah* 137,540 1994

Shahamah 135,469 1994

Ghasha 137,514 1995

Ish 137,540 1995

Mubaraz 137,000 1996

Mraweh 137,000 1996

Al Hamra 137,000 1997

Umm Al Ashtan 137,000 1997

* committed for conversion to floating storage unit
But these vessels now look small and inefficient compared with modern two-stroke LNG tonnage. The company has already
moved to find alternative employment for one vessel. It has chartered out the 137,540-cbm Al Khaznah (built 1994) on a 15-
year deal, with a five-year extension option, to terminal developer Atlantic Gulf & Pacific. The vessel is to be used as a floating
storage unit for the new Karaikal terminal in India starting later this year. But Adnoc L&S will also need to review its fleet and
look at how it might upgrade them to comply with the incoming Energy Efficiency Existing Ship Index and Carbon Intensity
Indicator from 1 January 2023.Term charters with group company Adnoc LNG on these ships are due to end this year.
SOURCE : WWW.TRADEWINDSNEWS.COM

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1
VIVA ADVANCES GEELONG LNG TERMINAL TALKS AS GAS SHORTAGE LOOMS
Fuel supplier Viva Energy is pitching its plan to build Victoria’s first gas import terminal in Geelong as the cheapest short-term
solution to the state’s looming gas crisis because it would avoid the heavy cost of overhauling a major pipeline. As gas
production from BHP and ExxonMobil’s 50-year-old Bass Strait fields rapidly dries up without enough new supplies to replace
it, the Australian Energy Market Operator is warning the nation’s southern states are in danger of facing gas shortages in
coming years, prompting fears of price rises. Mining magnate Andrew “Twiggy” Forrest’s Squadron Energy is developing a
shipping terminal to begin importing liquefied natural gas (LNG) into Port Kembla in Wollongong to address the shortfall, which
authorities say will help alleviate the pressure in Victoria. However, gas market participants increasingly expect Viva Energy’s
proposed terminal at the site of its Geelong oil refinery will also be required amid concerns about a $70 million upgrade to
reverse the one-directional pipeline between NSW and Victoria leading to heavy tariffs for Victorian buyers. Viva chief business
development officer Lachlan Pfeiffer said the company was now in talks with the state’s major gas retailers and had growing
confidence in future use of the import terminal to move forward with the project. “Reversing the Eastern Gas Pipeline is a
major upgrade, and that cost needs to be recovered from customers through tariffs,” Mr Pfeiffer said. “It isn’t necessary, and
those costs can be avoided through the development of a local Victorian supply terminal.” Piping gas from Port Kembla into
Victoria could cost an extra $1 a gigajoule, according to an analysis by Graeme Bethune of energy consultancy EnergyQuest,
meaning it could be nearly 15 per cent more expensive. source : https://www.smh.com.au/business/companies/viva-advances-geelong-lng-terminal-talks-
as-gas-shortage-looms-20210829-p58mtr.html

CHEVRON PREPARING FOR WHEATSTONE LNG MAINTENANCE

Chevron’s unit in Australia is preparing to start work on the first major turnaround at its 8.9 mtpa Wheatstone LNG plant near
Onslow in Western Australia. The Wheatstone LNG facility, which shipped its first cargo in 2017, features two trains and a
domestic gas plant located at the Ashburton North Strategic Industrial Area in Western Australia’s Pilbara region. Natural gas
arrives from the offshore Wheatstone, Iago, Julimar and Brunello gas fields. “Commencing in September, approximately 500
workers will come together to undertake Wheatstone’s first turnaround,” a Chevron spokesperson told LNG Prime in an emailed
statement on Monday. “Close to 80% of the work done will be undertaken by Western Australian-based companies and
suppliers,” the spokesperson said.

First Wheatstone LNG train

The upcoming maintenance will mainly focus on the first Wheatstone LNG train. To remind, Chevron has previously said in a
notice it had planned to shut more than “one LNG train but not greater than one and a half LNG trains” at its Wheatstone
facility from September 2 to October 7, 2021. The firm also said in the notice it had planned to close more than “one-and-a-
half of an LNG train” at Wheatstone from April 4 to May 9, 2022. However, these dates could change. Maintenace works at
Wheatstone follow the completion of maintenance and repair works at three Gorgon LNG trains on Barrow Island in Western
Australia. Chevron said in July it had completed repair works on heat exchangers at the third train at its giant 15.6 mtpa

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(Sale and Purchase) (Gas projects)
2
Gorgon LNG facility after finding “weld quality issues” that closed the plant’s first and second train. Also, Chevron said earlier
this year it had managed to increase the design capacity at the Gorgon facility by 5 percent and the Wheatstone plant by 9
percent. Chevron Australia has a 64.14 percent operating stake in Wheatstone. Other partners include KUFPEC (13.4 percent),
Woodside (13 percent), and Kyushu Electric (1.46 percent), together with PE Wheatstone, partly owned by JERA (8 percent).
source : https://lngprime.com/australia-and-oceania/chevron-preparing-for-wheatstone-lng-maintenance/27589/

HHI STARTS WORK ON PGNIG-CHARTERED LNG CARRIER

South Korean shipyard Hyundai Heavy Industries (HHI) held a steel-cutting ceremony for the first out of four LNG carriers that
Norway’s shipping company Knutsen charted to Poland’s LNG importer PGNiG.The ship is the first of two 174,000-cubic
metres LNG carriers which will enter service in 2023. To remind, PGNiG Supply & Trading (PST), a subsidiary of Poland’s oil
and gas company, signed an agreement with Knutsen OAS Shipping for chartering of LNG carriers. The companies signed the
deal for the first two vessels in November last year, and the second deal for an additional two in July this year. The second
batch will enter service in the first half of 2024. Each of the four tankers will be able to transport a fuel load equivalent to
about 100 million cubic metres after regasification. Knutsen will be responsible for the delivery and servicing of the vessels,
while PST will control their commercial operations. Moreover, the Polish firm will be their sole user of the ships for ten years
with the possibility of extension. It plans to use its gas carriers primarily to transport LNG from U.S. gas liquefaction facilities.
SOURCE : WWW.OFFSHORE-ENERGY.COM

INDONESIA APPROVES BP’S CCS SCHEME FOR TANGGUH LNG

BP and its Tangguh LNG partners today confirmed that Indonesian oil and gas regulator SKK Migas has approved the plan of
development (POD) for a key carbon capture utilisation and storage (CCUS) project at the Tangguh LNG export complex.
Significantly, BP claims this will make Tangguh "one of the lowest greenhouse gas (GHG) intensity liquefied natural gas (LNG)
plants in the world." This new development is estimated to enable a potential additional recovery of 1.3 trillion cubic feet (Tcf)
of gas, from both the Ubadari field and Vorwata carbon capture utilisation and storage (CCUS) project, BP said in a statement.
Front-end engineering and design (FFED) work is expected to begin in mid-2022 and start-up is targeted in 2026. Although,
BP and its partners will first have to take a final investment decision (FID) and secure additional approvals from SKK Migas
relating to technical aspects of the project. Crucially, BP will need to implement carbon capture and storage (CCS) to expand
output at the Tangguh project to meet its emissions reduction targets under its 2050 net-zero pledge, which also has
intermediate targets set between 2020 and 2040. BP’s new upstream investments in Indonesia, will not be possible without
associated CCS projects to keep its emissions profiles in check. However, CCS technology remains in the early stages of
development globally and is yet to be proven on a large scale. Indeed, Chevron is receiving heavy flak and potential fines for
failing to meet emissions reduction targets at its troubled CCS scheme that forms a crucial element of the Gorgon LNG export
project in Australia. Its partners include Shell and ExxonMobil.

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Fast-tracked project
BP’s Ubadari field development is being fast-tracked as a result of a successful appraisal programme and is planned to be
produced via installations connected by offshore pipeline to the Tangguh LNG facilities. The Vorwata CCUS development will
see about 25 million tonnes of carbon dioxide (CO2) injected back into the Vorwata reservoir to reduce venting of the majority
of produced CO2 and provide incremental gas production through enhanced gas recovery (EGR), said BP.
SOURCE : https://www.energyvoice.com/oilandgas/asia/346090/indonesia-approves-bps-giant-ccs-scheme-for-tangguh-lng/

GUNVOR TAKES LNG CARRIER ORDERED BY CSSC SHIPPING ON LONG-TERM

CHARTER
Trader steams in on Hudong-Zhonghua newbuilding as it talks up expansion in China. Trader Gunvor has signed a long-term
charter for an LNG carrier newbuilding ordered speculatively by CSSC (Hong Kong) Shipping. Gunvor said it had inked a long-
term bareboat contract for the 174,000-cbm LNG carrier Gui Ying, which is still under construction, but did not detail the
charter period. The ship, which has just started gas trials at China State Shipbuilding Corp-controlled Hudong-Zhonghua
Shipbuilding (Group) in Shanghai, is due for delivery in October. It will be technically managed by Bernhard Schulte
Shipmanagement. The trader said the deal will be the first in which the unnamed Gunvor subsidiary has taken an LNG vessel
on bareboat charter. A spokesman confirmed it is also the company's first LNG transaction with CSSC Shipping. Gunvor said
the ship will be employed in the company’s worldwide LNG trade. “China will play a vital role in Gunvor's trading activity over
the next several years, especially in LNG,” the trader said. “We consider our agreement with CSSC on Gui Ying to be a
significant cornerstone for Gunvor's platform for further expansion in China.” In a recent LNG shipping review, shipbroker
Fearnleys has named Gunvor as the company heading its list of charterers for fixture numbers — both in terms of number of
deals and length of the fixtures. Gunvor also emerged as the top charterer of LNG carriers fixed for periods of three years or
less. Speaking about its pride in the charter deal, CSSC Shipping said it sees this as confirmation of the “high quality WinGD
X-DF propelled LNG carriers” it has ordered in series at the yard.“We look forward to further develop and extend our close
cooperation with the Gunvor through our initial pioneering deal on Gui Ying,” the company added. Gui Ying is one of two
apparently speculatively-ordered LNG newbuilding contracted by CSSC’s shipping arm in 2019 part of a tranche of 36
newbuildings facilitated by CSSC and announced in Beijing. In August CSSC’s shipping arm signed a charter deal of up to
four years with domestic gas giant PetroChina for the first of the two sistership, the Mu Lan. This covers two firm years plus
a similar optional period. This first vessel was delivered 29 August. In July CSSC firmed up one of two options it was holding
at the yard for a vessel delivery in 2024. SOURCE : WWW.TRADEWINDSNEWS.COM

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4
CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES THE ACQUISITION OF
THREE LATEST GENERATION LNG CARRIERS
Transaction illustrates the continued transition of CPLP to a growth-oriented Partnership with assets in the most attractive
seaborne transportation sectors. Transaction highly accretive across multiple financial and qualitative metrics Partnership has
option to purchase three additional Liquefied Natural Gas Carriers (“LNG/C”) Important step towards reducing the environmental
footprint of the Partnership and being part of the transition to carbon neutral shipping. ATHENS, Greece, Aug. 31, 2021
(GLOBE NEWSWIRE)

Capital Product Partners L.P. (the “Partnership,” “CPLP” or “we” / “us”) (NASDAQ: CPLP), an international owner of ocean-
going vessels, today announced that it has agreed to acquire three 174,000 cubic meter (“cbm”) latest generation X-DF LNG
carriers from CGC Operating Corp. (the “Seller”), for total consideration of $599.5 million comprised of

(i) $147.1 million of cash on hand,

(ii) the assumption of the $427.4 million of secured debt,
(iii) the issuance of $15.0 million of new common units of CPLP at a premium to the current trading unit price and
(iv) $10.0 million of unsecured, interest free seller financing.

The three vessels are the LNG/C Aristos I built in 2020, and the LNG/C Aristarchos and the LNG/C Aristidis I built in 2021,
all three constructed at Hyundai Heavy Industries Co., Ltd (“Hyundai”). The LNG/C Aristos I and the LNG/C Aristarchos are
expected to be delivered to the Partnership by September 15, while the LNG/C Aristidis I is expected to be delivered by the
end of November 2021.

The LNG/C Aristos I and the LNG/C Aristidis I are under long-term time charters with BP Gas Marketing Limited (“BP”),
which together with the first two optional periods, expire in October 2027 and December 2027, respectively. In view of the
structure of the BP charters, we believe that the first two optional periods are highly likely to be exercised under most market
conditions. BP holds additional options, which could extend the charter of the vessels to October 2032 and December 2032,
respectively. The LNG/C Aristarchos is under a long-term time charter with Cheniere Marketing International LLP (“Cheniere”),
which expires in February 2025. Cheniere holds two 1-year options beyond that.

The total contracted revenue for all three vessels under the charters is approximately $391.0 million, the average remaining
charter duration is 5.6 years and average daily rate across all three vessels is approximately $67,630 per day. These figures
are inclusive of the first two optional periods under the BP charters. This translates into an increase of approximately 86% in
contracted revenues compared to the Partnership’s current fleet, with an expected increase of the remaining charter duration

Sandp@cygnus-energy.com Gas@cygnus-energy.com
(Sale and Purchase) (Gas projects)
5
to 4.6 years. The acquisition will also reduce the average fleet age from 10.4 years to 8.8 years. Importantly, the LNG/C
vessels are expected to be approximately 23% more energy efficient compared to the 2020 fleet average of CPLP in terms of
their Annual Efficiency Ratio (“AER” – g-CO2 /ton mile) and are expected to further reduce the environmental footprint of the
Partnership in terms of other greenhouse emissions, as their primary propulsion fuel is natural gas.

In connection with the transaction and consistent with the Partnership’s growth strategy, the Partnership secured an option to
acquire an additional three X-DF LNG sister vessels at an average price of $207.7 million per vessel with contracted revenues
of approximately $429.0 million (“Optional Vessels”) and an average daily rate across all three vessels of approximately
$70,650 per day. The Optional Vessels are all built in 2021 and are chartered to BP, Cheniere and Engie Energy Marketing
Singapore Pte Ltd with a remaining charter duration of 6.3 years, which includes in the case of the BP time charter the first
two optional periods. The purchase option may be exercised individually as to any Optional Vessel at any time on or prior
to November 1, 2021.

The Partnership has also obtained from Capital Maritime & Trading Corp. (“CMTC”) a right of first offer on six vessels (“ROFO
Vessels”) comprising three 13,278 TEU eco container vessels with a 10-year charter to Hapag Lloyd Aktiengesellschaft and
expected delivery between October 2022 and May 2023, and three LNG/C vessels with expected delivery in January, October
and December 2023.

Mr. Jerry Kalogiratos, Chief Executive Officer of the Partnership’s General Partner, commented: “We are very pleased to have
concluded this transformative transaction for the Partnership with the acquisition of these three, brand new, high specification
LNG carriers at a time, when the LNG market is exhibiting strong long-term fundamentals. The acquisition is transformative
across all metrics, as it is expected to be highly accretive to our distributable cash flow and earnings per unit, to renew the
Partnership’s fleet and replenish its earnings capacity, to enhance our cash flow visibility and diversify our customer base with
investment grade counterparties. At the same time, it is an emphatic step towards reducing the environmental footprint of the
Partnership and being part of the transition to carbon neutral shipping.”

“Moreover, we have managed to complete this transaction with minimal use of new equity, while securing for the Partnership
additional growth opportunities through the Optional Vessels and ROFO Vessels, providing visibility of a robust pipeline of
high-quality growth for the Partnership. In the coming months, as we seek to raise external capital to potentially execute on
these growth opportunities, our primary focus will continue to be on accretion to distributable cash flow per unit and earnings
per unit recognizing the discrepancy between our market equity valuation and our views on the intrinsic value and earnings
potential of the Partnership.” “Finally, the Partnership’s Board will continue to review the Partnership’s capital allocation policy
with a goal of returning capital to its unitholders through unit distributions and unit buybacks.”

Sandp@cygnus-energy.com Gas@cygnus-energy.com
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6
Transaction Financing Details
The LNG/C Aristos I and the LNG/C Aristarchos are subject to indebtedness of $148.9 million and $155.5 million, respectively,
under sale and lease back transactions with Bank of Communications Financial Leasing Co Ltd (“BOC lease”). The LNG/C
Aristidis I is subject to a term loan entered into with a syndicate of banks led by ING Bank N.V. (the “ING facility”), which will
have an outstanding principal amount of $123.0 million in November 2021, when this vessel is expected to be delivered to the
Partnership.

Quarterly principal repayments under the BOC lease amount to $3.2 million and $3.1 million decreasing to $2.4 million and
$2.3 million from the fourth quarter of 2023 for the LNG/C Aristos I and the second quarter of 2024 for the LNG/C Aristarchos
respectively. At maturity on October 2027 and May 2028, the lease provides for a purchase obligation to acquire each vessel
at the predetermined price of $83.4 million and $83.5 million respectively. In addition, the lease agreement includes various
purchase options commencing from the first-year anniversary of the lease. The BOC lease bears interest at LIBOR plus a
margin of 2.70%.

The ING facility bears interest at LIBOR plus a margin of 2.50%. Quarterly principal repayments amount to $2.4 million through
the fourth quarter of 2023, then decreasing to $1.7 million. A balloon payment of $74.1 million is payable together with the
final quarterly installment in December 2027.

To be noted, the $15.0 million of new common units to be issued as part of the consideration will be priced for purposes of
the transaction at a 5% premium to the Volume Weighted Average Price of the common units over the 90-trading day period
ending two trading days prior to the applicable closing, but at a price of not less than $13.00 per common unit.

The Seller financing component of the consideration will be unsecured, interest free and not required to be repaid for twelve
months from the delivery of the vessels.

The parent company of the Seller is beneficially owned 50% by a US based financial sponsor and 50% by Mr. Miltiadis
Marinakis, who is the ultimate controlling person of all membership interests of the Partnership’s General Partner. The
transaction was negotiated and unanimously approved by the conflicts committee of the Board of Directors (“Committee”) and
was also unanimously approved by the full Board of Directors. Evercore Group L.L.C. served as financial advisor and Fried,
Frank, Harris, Shriver & Jacobson LLP served as legal advisors to the Committee. source : http://www.capitalpplp.com/node/14406

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7
CHARTER CONTRACT QUESTIONS EMERGE AS LNG CARRIERS FACE EEXI AND CII
Shipowners could face conflicting obligations with charterers on speed reduction. Some shipowners are consulting lawyers over
the repercussions of the new regulations for long-term charters on their vessels.Stephenson Harwood partner Tom Adams, a
lawyer who has made a deep dive into the subject and is advising companies, said LNG emerges as something of a special
case. This is partly because the target reductions for vessels under the Energy Efficiency Existing Ship Index (EEXI) are
relatively high, but also because it is one of the only sectors that has reduced speed mechanisms written into charterparties.
For older, less-efficient ships, he said the most likely way owners can meet the targets is by reducing speed and fitting power
limiters. Adams said any initial modifications are likely to fall to the shipowner because it is an owner’s responsibility to comply
with pollution conventions. But he asked: Is it right that it is the owner’s responsibility to bear all the commercial impact
thereafter? Adams said there are legal issues about whether an order from a charterer to sail at a speed that was guaranteed,
but that the vessel can no longer make because of modifications made to comply with the International Maritime Organization
regulations, is an order that owners are obliged to follow.

Illegitimate orders?
“The predicament is that owners have an apparently conflicting set of obligations,” he said. Shipowners might say a charterer’s
order is impossible or unlawful, so they would be entitled not to follow it, he explained. But charterers might argue to use the
contractual mechanism for reduced speed and ask to be compensated by cutting hire costs because the vessel can no longer
go faster. Cases involving illegitimate orders usually centre on things charterers did not contemplate. But in this case the
charterer would have contemplated sailing at these speeds, so it is difficult for owners to say they should ignore charterers’
orders. Adams said that as a retrospective assessment of a vessel’s efficiency, the Carbon Intensity Indicator (CII) raises a
different question. An owner might receive an order from a charterer that it is obliged to perform and that at the time looks
legitimate but which may ultimately prove to have been an inefficient operation. This might then result in a vessel having its
CII rating downgraded. For new contracts, a standard clause could be included, Adams said. “But for charters assigned some
time ago for a long time hence, it is going to be potentially a problem that the parties are going to have to grapple with.”
source : www.tradewindsnews.com

PSO BOOKS COSTLIEST LNG CARGO FOR SEPTEMBER

Making a new record, state-run Pakistan State Oil (PSO) on Tuesday awarded a liquefied natural gas (LNG) cargo to commodity
trader Vitol at 24.5456pc of Brent (about $17.86 per mmBtu) – the most expensive so far – for delivery on Sept 26-27. “PSO
has decided to award the below mentioned cargo for supply of LNG,” PSO announced on its website. Vitol was the single
bidder for the Sept 26-27 cargo. Earlier, PSO had rejected slightly higher bid of 27.54pc of Brent by the same single bidder
for delivery on Sept 24. The previous record of the highest LNG price was that of $15.93 per unit (22.13pc of Brent) from
Qatar Petroleum for Aug 29-30 delivery. On Aug 24, another state-run firm Pakistan LNG Ltd (PLL) had also received very
expensive bids for seven LNG cargoes for October and November ranging $17.1449 and $22.6 per mmBtu.

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(Sale and Purchase) (Gas projects)
8
PLL has not yet awarded contract for any of the cargoes, bids for which are still valid until next week, and has gone into
emergency re-bidding for five cargoes. In a written comment to Dawn, PSO had confirmed last month that the cargo for Aug
29-30 at $15.93, or 22.13pc, was the most expensive so far. “The highest slope PSO has paid was in February 2016 which
was 18.93pc of Brent,” a company spokesperson said. PLL is now sought fresh bids for five cargoes with delivery targets on
Oct 8, 23 and 28 besides Nov 6 and 12. All these were single bids from Vitol Bahrain. Its bid rates ranged between $19 and
$22.58 per mmBtu. To be precise, Vitol bid for Oct 7-8 cargo at $22.5866 per unit, $20.9466 for Oct 22-23, $18.9966 for
Oct 27-28, $19.6966 per unit Nov 11-12 and $20.9266 for Nov 26-27 delivery window. Although, it has not yet awarded two
other cargoes but re-bidding for five cargoes meant the PLL authorities had made up mind to accept two bids for delivery on
Oct 17 and Nov 16. Total was rated lowest evaluated bidder for its both bids at the rate of $17.1449 per mmBtu for delivery on
Oct 17-18 and $17.5350 per mmBtu for Nov 16-17 delivery window.The bids for four spot LNG deliveries in September accepted
by the PLL ranged between $15.2 to $15.5 per mmBtu and at the time were the highest since the beginning of LNG imports
in 2015.

A power sector expert said at LNG price beyond 17-18pc of Brent, furnace oil becomes competitive for power generation. He
said spot markets had recently dropped slightly after Russia hinted at increasing gas supplies to Europe but later noted it may
not be possible before January, hiking LNG prices again.Pakistan’s average LNG prices may, however, become lower on the
back of second LNG import deal with Qatar that has to formally operationalise in December this year at about 10.3pc of Brent
coupled with old first deal of $13.37pc of Brent with Qatar. This would take the overall supplies under long-term deals to about
70-75pc of total existing terminal capacity, leaving smaller quantities to the vagaries of unpredictable spot market.
Source : https://www.dawn.com/news/1643765

FLOATING STORAGE UNIT ARRIVES OFF DELAYED PORTOVAYA

An LNG carrier converted into a specialised floating storage unit by Russian giant Gazprom has finally moved into location
near the long-delayed Portovaya LNG export plant, which is expected to start up soon near Vyborg on the Baltic Sea coast.
Eikland Energy data service iGIS/LNG said the 138,107-cbm Portovyy (ex-Excel, built 2003) left its Skagen anchorage on 13
August and has now arrived off Vyborg.Russian sources said Gazprom is aiming to start production at the 1.5-million-tonne-
per-annum plant to the north-west of Saint Petersburg in September, although this deadline may slide into 2022. Gazprom is
planning to supply LNG as bunker from the new facility. Gazprom Neft’s 5,800-cbm LNG bunker vessel (LNGBV) newbuilding
Dmitry Mendeleev, which delivered in Singapore in August, is expected to be used at the plant. The LNGBV is due to arrive
in Vladivostok at the end of August and is then expected to take the Northern Sea Route to its new base. The Portovaya plant
has suffered long delays to its start-up. Gazprom originally planned to fire up the project in late 2018 after works started on
construction two years earlier.

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(Sale and Purchase) (Gas projects)
9
But the construction schedule fell behind schedule. In the interim, the LNG carrier to be used as the project’s FSU underwent
conversion and re-emerged on the market. The Portvyy was specially adapted for the project with an ice belt fitted to its
portside hull to protect the vessel from ice floes in the region. Its steel plate was also changed to strengthen its hull. The FSU
will be moored starboard side at the Portovaya plant. The unit will be capable of loading and discharging simultaneously and
has been designed to -remain on site for 20 years. While the vessel waited for the project to start, it has been offered out for
trading. But the ice belt, which extends 1.5 metres out from its hull, has proved a consideration for charterers. Portovaya LNG,
which is being jointly developed with Russian engineering company SRDI Oil & Gas Peton, will use pipeline gas to produce
1.5 mtpa of LNG. The FSU will be moored behind a breakwater and take on cargoes produced by the plant until they are
ready to be -offloaded onto visiting vessels. source : www.tradewindsnews.com

ZODIAC LINES UP $1.1BN DUAL-FUELLED CAR CARRIER CHINA ORDER

Company joins LNG-fuelled car carrier crush as operators come under pressure from manufacturers to cut emissions. Eyal
Ofer-controlled Zodiac Maritime has pencilled in orders with two Chinese shipyards for up to 14 LNG dual-fuel post-panamax-
sized pure car/truck carriers (PCTCs) worth more than $1.1bn.
TradeWinds has learned that the company has signed a letter of intent (LOI) for a quartet of 7,000-ceu firm vessels at CIMC
Raffles priced at just over $83m each. These first vessels are scheduled for delivery from 2023. Zodiac has also secured a
further eight optional slots for sisterships that could boost its PCTC newbuilding tally to 12 ships. Zodiac is also believed to
have signed a second LOI with another Chinese shipyard — thought to be Xiamen Shipbuilding — for a further two PCTC
newbuildings of a similar size and design. The vessels being lined up by the company are among the largest PCTCs and will
be constructed to the latest designs from the Shanghai Merchant Ship Design and Research Institute. They are not thought to
have charter contracts yet.

Zodiac currently operates a fleet of 13 PCTCs built between 1994 and 2018. Demand for large PCTCs that can offer lower
emissions appears to be heating up with more orders in the works. Norwegian owner Peter Gram is also rumoured to be lining
up a series of PCTC newbuildings at Shanghai Waigaoqiao Shipbuilding in China and other names are being whispered in the
market. Brokers said vessel operators are coming under pressure from shippers and manufacturers that are keen to demonstrate
emissions reductions in their own operations and to downstream customers. In addition, there is a move towards operators
locking in dedicated capacity so they can control as many elements of the supply chain after the dislocation seen in the
container trades over the past year. Affinity (Shipping) detailed that between 20 and 30 PCTC newbuildings have been
contracted in the past few weeks, almost all of which have been dual-fuel vessels that will run on LNG and built at Chinese
shipyards.

Sandp@cygnus-energy.com Gas@cygnus-energy.com
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10
Chinese yard haul
The broker named at least five yards in China that are “actively involved” in negotiations. Those who have ordered tonnage
include Wallenius Marine, which also turned to CIMC Raffles for up to six 6,500-ceu dual-fuel vessels in a deal backed by
car giant Volkswagen. Idan Ofer’s Eastern Pacific Shipping has also extended its LNG-fuelled PCTC orders to 12 vessels with
four firm 7,000-ceu PCTCs contracted at China Merchants Jinling Shipyard (CMJL) Weihai. Eastern Pacific has previously
contracted 7,000-ceu vessels. In June, the company booked four firm PCTCs at CMJL Nanjing or Jinling Shipyard. Both
contracts include options for two additional vessels. John Fredriksen-led leasing outfit SFL Corp doubled up on an order for
two dual-fuelled, 7,000-ceu PCTCs. The first two vessels have been chartered to Volkswagen. But Mitsui OSK Lines and
NYK Line bucked the trend, instead looking to Japanese shipbuilders for slots. MOL turned to Shin Kurushima Dockyard and
Nihon Shipyard — a joint venture between Imabari Shipbuilding and Japan Marine United — to build four 7,000-ceu LNG-
fuelled car carriers, while NYK Line has lined up a 12-ship order for similar-size vessels at the same yard grouping.
source : www.tradewindsnews.com

EASTERN PACIFIC LIFTS LNG-RUN CAR CARRIER TALLY

Singapore’s Eastern Pacific Shipping (EPS) has doubled its order for LNG-fuelled pure car/truck carrier (PCTC) newbuildings
to up to 12 units, bringing its total potential spend to more than $1bn. The Idan Ofer-controlled company has been encouraged
by the recent charter of its 4,092-ceu Lake Como (built 2009) to Zim for $30,000 per day — a level not seen for many
years. Shipbuilding sources told Trade-Winds that EPS has placed an order for four firm 7,000-ceu PCTCs at China Merchants
Jinling Shipyard (CMJL) Weihai, also known as Jinling Weihai. The deal includes options for two additional vessels. It is the
second PCTC contract that EPS has inked in the space of three months. In June, it booked four firm vessels at CMJL Nanjing,
known as Jinling Shipyard. That deal also included options for two additional ships. An industry source said: “Jinling Shipyard
and Jinling Weihai are both under the umbrella of China Merchants Heavy Industry (CMHI). The design of EPS’ PCTCs at
Jinling Weihai is the same as the one at Jinling Shipyard.” He added that Jinling Weihai was also able to offer EPS a similar
delivery window to Jinling Shipyard, which is slated to deliver in 2024. EPS is said to be paying about $87m each for the
Jinling Weihai newbuildings — the same price as at Jinling Shipyard. They will be able to run on LNG and conventional marine
fuels. Shipbuilding sources said EPS started the newbuilding discussions before the hike in shipbuilding prices. They added
that shipowners would be quoted $90m today. A car carrier source said EPS’ newbuildings are still charter-free. However, the
owner is in advance negotiations with charterers. source : www.tradewindsnews.com

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11
BUNKER TANK-TYPE CHOICE HOTS UP FOR SHIPOWNERS ON LNG-
FUELLING
Owners need to consider best solution but competition among designers and yards remains fierce. Boxship owner Seaspan
Corp recently made a key technical adjustment to the latter delivering half of its order for 10 dual-fuelled neo-panamax
boxships, switching the vessels bunker tanks from a type-B to a membrane-type design in a bid to make the ships “ammonia-
ready”. The owner, which is building the 10 ships at Samsung Heavy Industries for charter to Israeli liner operator Zim, will
now fit five of the vessels with 12,000-cbm, GTT-designed Mark III bunker tanks. The first five containerships will sport 9%
nickel steel type-B tanks as originally specified. But according to the International Code of Safety for Ships using Gases or
other Low-flashpoint Fuels, it is not acceptable to use tanks with a nickel content above 5% to carry ammonia — hence the
switch.

OWNER INTEREST
Seaspan chief operating officer Torsten Pedersen said at the time that by building the ships “ammonia-ready” the company is
“taking a long-term view towards future-proofing these vessels”. GTT commercial director David Colson said for non-LNG
carrier owners, the LNG bunker tank is only a small part of the ship and there could be a temptation to take the design the
yard is offering. But he added: "We see owners now taking more interest in the tank and its performance." To date, off-the-
shelf type-C designs made of 9% nickel steel have proved to be the go-to design for LNG bunker tanks. These are
comparatively cheap, compared with integrated hull solutions such as type-B and membrane systems, can be installed in a
variety of easy-to-access locations on a vessel and are readily available. But as shipowners have moved to order larger,
deepsea tonnage, bigger bunker tanks are needed to accommodate vessels’ longer trading ranges. This, in turn, has led to a
push to hold down capital costs and minimise the loss of cargo or passenger space, in particular for containerships and cruise
vessels. In addition, owners are now also needing to consider the future fuels they might need.

BOXSHIP MASH-UP
Both type-B and membrane tanks have now been ordered for containership newbuildings. But there is also another new kid
on the block. Since 2010, South Korean steelmaker Posco has been working on the development of high-manganese steel
as a cheaper cryogenic material to the 9% nickel alloy or stainless steel commonly used in LNG bunker tanks. To date, just
one 50,000-dwt bulker working on South Korean coastal trades has been built with bunker tanks constructed using the new
steel. But in the past 12 months, South Korea's Daewoo Shipbuilding & Marine Engineering has racked up a series of 26
orders for dual-fuel VLCCs and ultra-large containerships, each of which will be equipped with either type-C or type-B bunker
tanks built from high manganese steel.

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12
DSME NEWBUILDING ORDERS TO BE EQUIPPED WITH HIGH-MANGANESE BUNKER TANKS
Number and size of
Number of Bunker
Vessel Owner/charterer Ship size LNG bunker tank
ships tank type
per ship

Advantage Tankers, AET and 300,000

VLCCs 10 Type-C 2 x 3,000 cbm
International Seaways/Shell dwt

23,660
Containerships 12 Hapag-Lloyd Type-B 1 x 18,500 cbm
teu

300,000
VLCCs 4 Adnoc Logistics & Services Type-C 2 x 3,000-cbm
dwt
Source: DSME
A DSME official said high-manganese steel is also newly tested and verified by Posco for the carriage of ammonia.
But its lower cost appears to be the key draw at present. A DSME spokesman said in raw material terms, the price of the
steel would be about 70% that of 9% nickel steel and, depending on its size, the tank would likely cost about 80% to 85% less.

CONSIDERATIONS
French designer GTT, which has largely cornered the LNG carrier sector on tank design, has also looked at high-manganese
steel. The company has so far developed a different alloy, which has been rolled into prototype thin membrane sheets but has
yet to be tested. Alexandre Tocatlian, head of product lines at GTT, said owners building LNG-fuelled vessels need to consider
the experience of the tank and fuel gas system providers, and look for companies that will follow them beyond the shipyard
warranty on their vessels. The impact of the weight of the tank on the vessel’s arrangement and the calculation of deadweight
or cargo loss is also important, as is boil-off gas management and maintenance, including tank access. GTT is targeting the
containership market, where it believes it can offer larger and cheaper tank solutions over type-B alternatives offered by
shipyards that will also save on cargo space. For the same size of vessel, Tocatlian said the company is able to offer more
capacity with membrane than a type-B tank. He gave the example of a 15,000-teu boxship for which GTT could offer a
14,000-cbm membrane-type tank design, compared with a shipyard’s 12,000-cbm type-B alternative. But the company feels
its membrane-type designs can also work for cruiseships, car carriers, large bulk carriers and VLCCs. Source :www.tradewindsnews.com

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13
FOUR MODULES COMPLETED FOR FIRST TRAIN AT NOVATEK’S ARCTIC LNG-2
Four modules for the first train of Novatek’s Arctic LNG-2 project have been completed by China’s Wison Offshore & Marine
Co. Weighing nearly 50,000 tonnes, the modules took nearly two years to complete. The first two modules have been delivered
to Russia, with the next two scheduled to depart Wison Marine’s Zhoushan yard in mid-September. The world’s largest LNG
liquefaction plant in the Arctic, the US$21.3Bn ALNG-2 Project consists of three LNG production trains, each with a nameplate
capacity of 6.6M mta. For the three trains, Wison Marine will construct and commission 150,000 tonnes of pipe rack modules,
including designing, procuring, constructing, commissioning and loading 21 BLM modules.Once completed, ALNG-2 will have
a total LNG capacity of 19.8 mta and about 1.6 mta of stable gas condensate. The project employs an innovative construction
concept using gravity-based structures.

Gas for the ALNG-2 is supplied from the Utrenneye field in the Gydan Peninsula, about 70 km across the Ob Bay from Yamal
LNG. ALNG-2 has secured the transport assets for the project, signing long-term charters for six Arc7 ice-class LNG carriers
with Sovcomflot and Mitsui OSK Lines and 15 similar ice-class vessels to be built by Russia’s Zvezda Shipyard. Sovcomflot
has ordered the lead ship of this class, with the remaining 14 ordered by Smart LNG, a joint venture between Novatek and
Sovcomflot. Built to the highest ice class, the LNG carriers will be capable of year-round operation in the ice-infested waters
of the Northern Sea Route. Each of the LNG carriers will have a length of 300 m, beam of 48.8 m, and cargo capacity of
172,600 m3. The propulsion system includes three azimuth propulsion units, with a total capacity of 45 MW. All 15 vessels
will operate under the Russian flag. In August, the keel was laid at Zvezda Shipyard for Sovcomflot’s vessel, with delivery
earmarked for 2023. source : www.rivieramm.com

ISRAELI SHIPPING FIRM ZIM CHARTERS LNG-FUELLED CONTAINERSHIPS

Israeli shipping company ZIM said September 1 that it exercised an option to charter another five container vessels from
Seaspan Corp. that are powered by LNG. ZIM was granted the option to charter the five additional vessels as part of a July
agreement to charter 10 vessels from Seaspan of the same class. “Seaspan will enter into agreements with a major shipyard
to construct the LNG containerships, which are anticipated to be delivered during the third and fourth quarters of 2024,”
Seaspan explained. “The LNG containerships are anticipated to be financed from existing liquidity, cash flow from operations,
and additional borrowings.” Seaspan put the aggregate purchase price at around $530mn. Shippers are obligated to reduce
their emissions in order to comply with a protocol from the International Maritime Organisation, dubbed IMO 2020. Ship
operators are turning to low-sulphur fuels, LNG and other cleaner fuels to address that. “We continue to invest the resources
necessary to be an industry leader and to prepare ourselves for the cleaner future of our industry,” said ZIM CEO Eli
Glickman.The LNG-powered vessels procured by ZIM have capacities of 7,000 twenty-foot equivalent. source : www.naturalgasworld.com

Sandp@cygnus-energy.com Gas@cygnus-energy.com
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14
PETROCHINA STARTS FOUR NEW TANKS AT TANGSHAN LNG TERMINAL
PetroChina has commissioned four new storage tanks at the Tangshan LNG receiving and regasification terminal, its parent
company CNPC said last week.The four new 160,000 m3 LNG storage tanks add to the four existing tanks at the terminal.
The combined storage capacity of the facility now stands at 1.28mn m3, state-run CNPC said. The 6.5mn metric tons/year
terminal received its first LNG cargo in 2013. PetroChina Jingtang LNG Co. operates the terminal while other partners are
Beijing Gas Group and Hebei Natural Gas. PetroChina operates three LNG import terminals in China – Jiangsu, Tangshan
and Dalian. The Jiangsu terminal is located in the Jiangsu province, the Tangshan terminal in the Hebei province and the
Dalian terminal in the Liaoning province. source : www.naturalgasworld.com

TOTALENERGIES INKS DEAL TO USE ARUN LNG STORAGE TANKS

Indonesia’s Petramina has signed a terminal use agreement with French TotalEnergies for the use of two storage tanks at the
3mn metric tons/year Arun LNG receiving and regasification terminal in Sumatra, it said on August 31. As per the deal,
TotalEnergies will use the two tanks to store LNG from its international portfolio. The first LNG shipment is expected to arrive
this month from Angola, Pertamina said. At present, the terminal has four LNG tank units with a total capacity of 508,000
m3."Focusing on this deal, we plan to ship vessels from our LNG portfolio in Angola for storage at the Arun LNG hub before
delivering cargoes to customers," TotalEnergies Gas and Power Asia's managing director Nic Poulteney said. TotalEnergies
has a 13.6% stake in Angola LNG.This collaboration will help Perta Arun Gas (PAG), which operates the terminal, become a
world-class LNG hub and regasification company, PAG's president director Arif Widodo said. Previously Arun was an LNG
export plant, Pertamina converted it into a regasification terminal in 2015. source : www.naturalgasworld.com

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