The global LNG shipping industry is witnessing a significant growth in terms of shipping demand, which had a positive effect on charter rates for ship-owners in 2018, with spot rates increasing by more than 100 percent, compared to the previous year. The tight LNG shipping market condition will keep the momentum for short and medium-term charter rates. However, with additional delivery of new build vessels, the rates should balance out slightly, while there is still an expectation of a tight market until end of 2020.
The year 2018 witnessed a sharp increase in the number of vessel deliveries; more than 50 compared to 30 deliveries in 2017. An additional 100 vessels are expected to be added by 2020, Nakilat, the global leader in energy transportation and maritime services, noted in its 2018 annual report.
The global market had witnessed a shift in terms of vessels technology in the past few years. Based on existing and orderbook vessels, by 2021, 46 percent of vessels will be equipped with Steam Turbine engines, followed by Dual Fuel Diesel Electric engines at 30 percent of fleet, then Slow Speed Gas Injection engines at 16 percent. The interest in moving to a newer, more efficient technology poses benefits for both owners and charterers due to the fuel efficiency it brings which consequently improves unit freight cost.
On Nakilat’s fleet profile, the report noted that with a fleet of 65 LNG, 4 large LPG carriers and one FSRU, Nakilat has one of the world’s youngest and largest gas fleets, with all vessels incorporating modern technology. Nakilat’s LNG carriers represent a total investment of approximately $11bn and have a combined carrying capacity of over 9 million cubic meters or 12 percent of the world capacity. The vast majority of these LNG carriers are dedicated to meeting the transportation requirements of Qatar’s massive LNG industry, providing the country and the world with a strategically important ‘floating pipeline of clean energy’.
Most of Nakilat’s vessels are employed through long-term time charter agreements with local gas producer Qatargas, while remainder of the fleet is utilized in international shipping markets. Nakilat’s jointly-owned LNG carriers are operated by the vessel’s co-owners, which include many of the world’s leading ship owning and operating companies.
In 2018, Nakilat expanded its joint venture partnership with Maran ventures, to include two additional LNG vessels. It also signed a landmark agreement with Excelerate Energy-USA, to establish a joint-venture company and acquire a 55 percent interest in a floating storage regasification unit (FSRU)) Exquisite, the first such vessel to join the Nakilat fleet. This acquisition is important for Qatar, paving way for further outreach to emerging markets ahead of the country’s plans to ramp up LNG production to 110mtpa in the coming years. In addition, it marked the beginning of Nakilat’s penetration into the FSRU market, in alignment with Nakilat’s long-term growth and development strategies, further bolstering its international portfolio.
