In a revamped effort to revitalise its shipbuilding industry, the Office of the US Trade Representative (USTR) has set out new conditions for LNGC operators and owners calling at US ports, among other ship types.
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Coming under Phase 2 of the re-issued edict on charging fees for Chinese built ships calling at US ports, LNGC owners and operators will be required to move 1% of US LNG exports on US-built, operated and flagged vessels within four years.
This percentage will rise to 4% by 2035 and to 15% per cent by 2047.
The phase-in period of 22 years is to ensure the sector has enough time to adjust, the USTR said, as currently, the US has no LNG shipbuilding capacity or expertise in this sector and only operates one LNGC, acquired earlier this year.
An operator or its non-compliant LNGC may be licensed to operate for up to three years, if an LNGC order is placed in a US shipyard of the equivalent or greater capacity within that time period, the order said.
However, the USTR said it will consult with the US Department of Energy (DoE) and other agencies, as appropriate, to provide notice and further technical information regarding the restrictions on all vessel types.
The only US flagged LNGC currently trading is the Crowley - owned 130,400 cu m ‘American Energy’, which last month became the first domestic LNGC to ship US-sourced natural gas to Puerto Rico, under an agreement with Naturgy, which operates a terminal at Penuelas on the island.
The recently purchased vessel, built in 1994 as MISC’s ‘Puteri Intan’, operates in accordance with the US Coast Guard Authorisation Act of 1996, Crowley said.
Between 1977 and 1980, US shipyards delivered 16 steam powered LNGCs for foreign trade, ie not built under the Jones Act.
Ten were delivered by General Dynamics, while three each came from Avondale and Newport News.
The original USTR order had said that a charge of up to $1.5 mill per ship call in a US port would be levied, depending on the vessel type and size. This created a considerable backlash from the industry, hence restrictions were watered down with LNGCs being treated separately under Phase 2 of the latest decree.
This could give a boost to South Korean shipbuilders should these restrictions materialise at the expense of their Chinese counterparts.
(Photo credit: Trafigura)
