LNG Newbuildings The “Darlings” of the Market

While 2019 has proven to be quite a lackluster year for newbuilding orders, some sectors have managed to excel, with the most prominent example being the LNG shipping segment, but also the dry bulk one. In its latest weekly report, shipbroker Banchero Costa said that “the interests around LNG carriers persists with additional options being declared in South Korea. Japanese owners Mitsui confirmed and additional 174,000 cbm at Daewoo for dely June 2021, the same did Minerva who increased its commitment to with the fifth unit, at Samsung for delivery in 2021, prices around $190mln. In the tanker market the only new to report is the declaration of two options at STX Korea for 50,000 dwt MR tanker Tier II on account of PCL, Singapore; price region $35mln each. In the drybulk market, it emerged a fresh order for 2 x 208,000 dwt Newcastlemax at NACKS by Winning of Singapore: a reported price of $57mln shows the premium over the average price of Chinese yard (it is still unclear if these units will be scrubber fitted). In the same segment H-Line optioned 2 further 208,000 dwt with New Times for delivery early 2020 at a price around $54mln (these are scrubber fitted, Tier III) vessels are covered by a COA with Vale. The Japanese owners Santoku Senpaku picked DACKS for an order for 2 x Ultramax for delivery around end 2020, price undisclosed”.

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In a separate note, Allied Shipbroking added that “interest for new orders in the dry bulk market continue to hold steady, with another 3 new orders being reported last week. The main focus last week was on the Kamsarmax segment, with several orders being noted in the year so far for vessels of this size, depicting a sign of confidence in this size segment. The steady recovery has led owners to re-consider any past newbuilding plans, with a healthier stream of new orders now being noted. However, oversupply concerns have been alleviated just yet and thus we are not expecting any excessive activity to take shape any time soon. On the tankers side, things also remained relatively stable this past week, with 4 new orders being witnessed. The majority of ordered vessels were MRs, in line with the positive prospects for the product segment that are prevailing in the market. Interest for product tankers is expected to continue to outpace activity in the crude tanker sector during the year, though it will be of little surprise if appetite for the latter starts to increase in pace”.

 

 

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Meanwhile, in the S&P market, Banchero Costa said that “in the dry sector, Maritime Power 177,000 dwt, built 2005 Universal was reported sold at $12.9mln; one month ago Shinyo Endeavour 170,000 dwt built 2002 Sasebo was done at $11mln. On Panamax, Nord Galaxy 77,000 dwt built 2006 Imabari was sold at $10.6mln to Greeks (BWTS fitted) and the older Rodon Amarandon 74,000 dwt built 2001 Namura was done at $6.65mln basis DD due to Chinese buyers. In the supramax segment, sales were focused on more vintage tonnage with Niton Cobalt 52,000 dtw built 2004 Tsuneishi (SS/DD due Sep 2019) reported at $7.8mln and Navios Vector 50,000 dwt built 2002 Mitsui sold at $7 mln. In the Handy segment, two USA controlled units Alpine and Summit 37,000 dwt built 2015 Nanjing Dongze were done en bloc at $14.5mln each. A modern Handysize reported sold was Glorious Sunrise 37,000 dwt built 2016 Imabari was done a month ago at $18mln. In the tanker market, during the week sales were focused in product tankers. MR Leopard 48,000 dwt built 2010 Iwagi seems sold at $16mln, the vessel has a TC attached for one fixed (from Jan19) plus one optional year at $12,400/d and $13,300/d gross. Furthermore Team Tapatio 47,000 dwt built 2003 Brodosplit was sold at $12.5mln including TC back for 3 years”, the shipbroker concluded.

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Similarly, Allied added that “on the dry bulk side, a very interesting week was due, with a good flow of transactions coming to light the past couple of days. It seems as though it was long overdue for a more vivid SnP market to take shape in the larger size segment. Despite this, its too early to call if this was just a momentary spike or if we are to expect more activity to take place over the coming months, on the back of the improved freight market, is yet to be seen. For the time being, it looks as though we will continue to see the main focus hold firm on the small and medium size ranges. On the tanker side, things slowed down considerably this week. At this point, the only active size segment is the MR, which actually leads the overall secondhand market for some time now. All-in-all, given that we haven’t noticed any clear direction in this specific market, we can expect a high level of asymmetry to take place, at least in terms of volume of transactions, in the short run”.

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Petronas achieved its first liquefied natural gas (LNG) drop by its floating LNG facility, PETRONAS Floating LNG Satu (PFLNG Satu), at the Kebabangan cluster field, 90 kms offshore Sabah, recently. Operated by Kebabangan Petroleum Operating Company (KPOC), Kebabangan field is the second location for PFLNG Satu after its successful operation in Kanowit field, Sarawak.

The introduction of first gas into the PFLNG Satu, achieved on 4th May 2019, was from Kebabangan field to the PFLNG Satu’s turret system via a 5-km flexible pipeline. The commencement of a series of start-up activities included the cooling down of natural gas until the production of the first LNG drop on 7th May 2019, just 3 days after.
 
PETRONAS Vice President of LNG Asset Zakaria Kasah said:

'This achievement showcases our focused execution and close collaboration efforts, within PETRONAS as well as externally with the State government and regulatory bodies. We not only prove our concept of relocatable floating LNG facility, but we have also seamlessly achieved the first LNG drop in just 3 days after first gas in. This is indeed another proud moment and a great milestone for PETRONAS and the floating LNG industry.'
 
Designed for water-depth of between 70 metres and 200 metres and a processing capacity of 1.2 million tonnes per annum (MTPA) with 155 crew onboard, PFLNG Satu will support PETRONAS’ global LNG portfolio and enhance its reputation as a preferred and reliable LNG supplier. The first LNG cargo delivery at the new field is expected in June, 2019.

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