LNG

Delfin Midstream Inc., the US floating LNG developer with a project in the Gulf of Mexico offshore Louisiana, has entered into a strategic investment agreement with Japanese shipping company Mitsui OSK Lines.

Oct 31 (LNGJ) - Mitsui OSK Lines, the Japanese shipping company with an operating fleet of around 100 liquefied natural gas carriers, reported a more than doubling of fiscal first-half net profits to 603.64 billion yen ($4.10Bln) compared with 278.07Bln yen ($1.88Bln) for its overall business including oil tankers, car carriers, containerships and dry-bulk vessels. MOL manages its LNG carriers and other fleets through six firms based in Tokyo, London, Hong Kong, Jakarta, Oman and Algeria and also has extensive fleets in the other sectors.

   MOL said first-half shipping revenues from April to the end of September came to 821.33Bln yen ($5.56Bln). “While continuing to generate stable profit through existing long-term charter contracts, the LNG carrier business posted a year-on-year decline in profit partially due to the expiration of some long-term contracts,” said the company. “The floating storage and regasification unit (FSRU) business posted a year-on-year increase in profit,” it added.

Royal Vopak, the Netherlands-based global storage company with four stakes in liquefied natural gas terminals and a new LNG import project for Hong Kong, reported a 7 percent increase in earnings to €827 million ($940M) from €780M in the previous year as soft business conditions persisted in energy storage.

July 20 (LNGJ) - JFE Steel of Japan has signed long-term charter agreements with the three main Japanese shipping companies, Mitsui OSK Lines, NYK Lines and K-Line for three LNG-powered bulk carriers to transport iron ore and coal. The three 210,000 deadweight-ton bulk carriers are being designed and built by Japanese shipbuilder Nihon Shipyard, a joint venture set up by Imabari Shipbuilding and Japan Marine United. JFE Steel said the charters were part of a gradual switch to LNG-fuelled vessels in an efforts to reduce shipping emissions.

Karmol, the Turkish-Japanese joint venture, said its first floating storage regasification unit (FSRU) has been delivered by Sembcorp Marine in Singapore and will begin sea trials ahead of deployment in the West African state of Senegal in June.

Sembcorp Marine posted a net loss of S$192 million (US$138.3M) for the six months to June 2020, following the “severe deterioration” of activities at all its Singapore yards as a result of the Covid-19 pandemic and amid a planned de-merger from parent Sembcorp Industries.

Sembcorp Marine’s results in the same six months of 2019 had amounted to a loss of S$7M.

The first-half 2020 earnings showed group revenues were S$906M and the net order book had S$1.91Bln of work outstanding, including liquefied natural gas sector ships such as LNG-powered vessels, bunkering ships and floating LNG storage.

A total of 74 vessels were repaired or upgraded at Sembcorp Marine yards in the 2020 first half, less the half the total of 153 vessels in the first six months of 2019.

The Sembcorp construction and conversion work for LNG mainly affects projects involving joint ventures of Japanese shipping company Mitsui OSK Lines.

Since April, when the Singapore government imposed its Covid-19 “circuit breaker” measures, in particular movement restrictions that disallowed migrant workers from leaving their dormitories for work, there was a substantial reduction in the group’s operating yard workforce (including sub-contractors) from about 20,000 to 850 persons.

Sembcorp Marine’s Singapore yards had to stand down and discontinue production activities, resulting in significant delays to project executions.

As a consequence, all divisions posted losses for the six months period, with the exception of Repairs & Upgrades which reported higher profits.

The company said Specialised Shipbuilding revenue was S$35M, up from S$7M in the year-ago period on higher earnings for Roll-On-Roll-Off passenger (Ropax) ferries as well as the LNG bunker vessel projects.

Revenue from Repairs & Upgrades totalled S$258M, which was 5 percent higher than the $245M in the 2019 first half.

This was due to higher revenue per vessel at S$3.49M from several upgrade projects for floating storage and regasification units (FSRU) and cruise ships.

Revenue for the Rigs & Floaters segment was S$459M, well down on the S$1.22Bln recorded in the 2019 first half.

Offshore Platforms revenue was S$130M. This included platforms successfully delivered for the Tangguh gas modules project in June 2020 from Sembcorp Marine’s Batam yard in Indonesia.

Singapore’s state wealth fund Temasek recently stepped in to support a S$2.1Bl rights issue by Sembcorp Marine to help its finances and as it also demerges from its parent company Sembcorp Industries.

Temasek in 2019 had offered to buy control of another Singaporean conglomerate Keppel Corp, whose businesses includes the hard-hit rig-building sector.

Sembcorp Industries owns 61 percent of Sembcorp Marine.

Sembcorp Marine President and Chief Executive Wong Weng Sun said during an earnings call on July 15 that the company had been positioned for recovery in 2020 before being hit by the double crises.

“Given the delays in executing our existing projects, and with new orders likely to remain depressed in 2020, the group now foresees that recovery will be pushed out to 2021 and beyond,” explained Wong.

“While we have yet to announce significant new orders this year, we have resumed discussions on several project opportunities,” added the CEO.

He has also brought in pay cuts across the board in all divisions of the company.

Wong said he had volunteered to take a 50 percent pay cut, senior management will take 15 percent salary reductions and middle management will be paid 10 percent less.

All other employees in Singapore and overseas will take a 5 percent pay cuts, except for those earning under S$1,800 a month. 

Sembcorp Marine of Singapore, ranked among the leading facilities in the world for LNG vessel repairs and upgrades, is the subject of a rights issue of S$2.1 billion ($1.5Bln) to recapitalise the shipyard group.

Sembcorp Marine shipyards in the Asian city state have built a reputation for LNG-powered vessels, bunkering ships and floating LNG storage.

The boards and management teams of Sembcorp Marine and its parent company, Sembcorp Industries, believe that the proposed rights issue and demerger will strengthen the financial positions of both and unlock shareholder value.

“With greater flexibility following the demerger, both companies can pursue their own sustainable growth paths on the back of changes to their industries in recent years,” it added.

Sembcorp Marine proposes to build on its core engineering solutions for the offshore, marine and energy industries.

One of its projects is the 12,000 cubic metres capacity LNG bunkering vessel ordered from Sembcorp’s Tuas Boulevard Yard.

On completion, currently scheduled for early 2021, the dual-fuel bunkering vessel will be chartered to Singapore’s Pavilion Gas for deployment for fueling ships with LNG in the Port of Singapore.

The vessel is the largest of its kind being built locally, in terms of size and LNG tank capacity and is Sembcorp’s first LNG bunker vessel construction project.

Other ongoing upgrades and conversion projects in LNG at Sembcorp’s Admiralty yard include the floating storage and regasification unit (FSRU) “Karmol LNGT Powership Africa” destined for Mozambique and other work.

Parent company Sembcorp Industries will continue to be focused on its core areas of energy and urban development and be poised to capture opportunities in the sustainable energy transition.

“Sembcorp Marine, which has been doubly hit by the Covid-19 pandemic and recent collapse in oil prices, will also be able to better address its urgent need to recapitalise, meet liquidity requirements, and strengthen its balance sheet to ride through the prolonged downturn in the offshore and marine industry,” said the statement.

Both Sembcorp companies will be seeking their respective approval of their shareholders at extraordinary general meetings (EGMs), which are expected to be convened around the of August or early September 2020.

The rights issue is also conditional on Sembcorp Marine shareholders passing a resolution to waive their rights to receive a general offer from Singapore wealth fund Temasek and in connection with the proposed distribution.

Sembcorp Industries has given an undertaking to vote in favour of the rights issue resolution at Sembcorp Marine’s EGM.

The current Sembcorp Marine order book comprises a fairly broad spectrum of product types, including several new-build floating production, storage and offloading vessels, offshore production platforms, as well as battery-operated roll-on, roll-off passenger vessels and LNG bunkering and conversions work.

The Sembcorp construction and conversion work for LNG mainly affects projects involving joint ventures of Japanese shipping company, Mitsui OSK Lines (MOL).

Sembcorp noted in its most recent earnings the Ministry of Manpower in the city state announced movement restriction measures that prevented migrant workers from leaving their dormitories for work.

The workforce of the shipyards normally amounts to 20,000 persons but was substantially reduced to 850 person.

The reduced workforce was deployed to manage critical works and support yard essential services such as emergency response teams, facilities and utilities management and yard security.

Karmol “LNGT Powership Africa” is part of a joint venture involving MOL and the Turkish floating power plant company Karpower International and the vessel is destined for Mozambique.

Gaztransport and Technigaz (GTT), the French technology firm for designs of systems for the maritime transportation and storage of liquefied natural gas, has been chosen by Marseille-based shipping group CMA CGM to provide services for its LNG-powered container ships.

GTT said it would provide assistance for the commissioning, operation and maintenance of CMA CGM’s future 23,000 TFE (twenty-foot equivalent) LNG-powered container ships equipped with GTT membrane containment technologies. 

Paris-based GTT noted that with 18,600 cubic metres capacity LNG tanks, these ships will be the largest container ships in the world to use LNG as fuel.

Bunkering vessels owned by French energy major Total and Mitsui Osk Lines of Japan will supply 300,000 tonnes per annum of LNG fuel to CMA CGM and its nine ultra-large newbuild containerships set to operate on the Europe-Asia trade route.

The GTT service package includes the training of crews of the CMA CGM fleet through the provision of the G-Sim training simulator, specially adapted to replicate the LNG operations of CMA CGM vessels.

“GTT will also provide on board technical assistance during the commissioning of LNG tanks and during the first bunkering operations,” explained the tanks designer.

It explained that, if necessary, CMA CGM may use a GTT service called “Hears” to obtain 24/7 technical assistance. 

“Thanks to the data continuously collected on board, the GTT teams will be able to assist and advise CMA CGM teams as closely as possible,” said GTT.

“In addition, the analysis tools integrated in the connected version will allow a follow-up over time of the tanks and their insulation spaces,” it added.

The company said its GTT services portfolio facilitates a smooth entry into the world of LNG for ship-owners.

“We are constantly expanding our range of services to meet the new expectations of ship-owners and are therefore very pleased to be able to support CMA CGM in the commissioning, operation and maintenance of its LNG-powered vessels,”  said Philippe Berterottière, Chairman and Chief Executive of GTT.

CMA CGM is one of the world’s largest container vessel operators with over 500 ships.

The first of the ultra-large LNG-power containerships took to the water at the Shanghai Jiangnan-Changxing Shipyard in October 2019 at an event attended by Rodolphe Saadé, Chairman and CEO of CMA CGM.

The first of the nine newbuilds was named “CMA CGM Jacques Saade” after the shipping line’s Beirut-born founder who died in June 2018.