LNG

QatarEnergy the leading global LNG producer and with three growth projects being developed, has signed 19 more charter contracts with Asian owners from countries like China and Malaysia under Qatar’s LNG fleet expansion programme.

QatarEnergy, the leading global LNG producer and with three growth projects being developed has signed time-charter party (TCP) agreements with Qatar Gas Transport Co. (Nakilat) for the operation of 25 conventional-size LNG vessels as part of the second shipowner tender under Qatar’s LNG fleet expansion programme.

The agreements were signed in Doha by Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs and President and Chief Executive of QatarEnergy and Abdullah Al-Sulaiti, the CEO of Nakilat.

A statement said that 17 of the 25 LNG vessels are being constructed at the Hyundai Heavy Industries (HHI) shipyard in South Korea, while the remaining eight are being constructed at Hanwha Ocean, formerly Daewoo Shipbuilding and Marine Engineering, also in South Korea.

“These agreements firm up last month’s selection of Nakilat as the owner and operator of up to 25 conventional-size LNG carriers, underscoring our continued confidence in Qatar’s flagship LNG shipping and maritime company,” said Al-Kaabi.

“This is a testament to Nakilat’s world-class capabilities as well as to the significant contributions of Qatari listed companies to our country’s national economy,” he explained.

“The agreements we signed today play an important role in implementing QatarEnergy’s historic LNG shipping programme, which will cater for our future requirements, as we move forward with the expansion of our LNG production capacity to 142 million tonnes per annum by 2030,” Al-Kaabi stated.

Each of the 25 vessels will have a capacity of 174,000 cubic metres and will be chartered out by Nakilat to affiliates of QatarEnergy pursuant to the 15-year TCP agreements.

Liquefaction surge

Qatar announced at the end of February 2024 that it was going ahead with a third huge expansion called the North Field West (NFW) project to take overall output to 142 MTPA by the end of the decade.

The NFW joint venture will add to production expansions already under way with the North Field East (NFE) and North Field South (NFS) LNG projects.

The current NFE ramp-up of QatarEnergy’s liquefaction capacity will take production from 77 MTPA to 110 MTPA by 2027.

The second phase, called the NFS venture, will further increase the LNG output capacity from 110 MTPA to 126 MTPA.

The new NFW project will be developed to take production to 142 MTPA.

Overall the three expansions will put into production a total of eight LNG mega-Trains, each with nameplate capacity of around 8 MTPA and total additional nameplate capacity of just over 64 MTPA.

French liquefied natural gas storage technology firm Gaztranzport and Technigaz (GTT) said it received an order from the Korea Shipbuilding & Offshore Engineering (SOE) group for the tank design for two LNG carriers and a Very Large Ethane Carrier.

The American Bureau of Shipping, the US maritime classification society, has inaugurated an ABS Global LNG Academy in the Qatari capital Doha and dedicated to training and educating mariners in modern LNG vessel operations.

Global shipping chaos is leading to huge additional economic costs for imports and exports and in terms of shipping liquefied natural gas spot charter rates for West of Suez and East of Suez have plummeted.

London shipbrokers said shipping spot charter rates for West of Suez slumped this week because of the Red Sea crisis by $40,000 per day to $105,000 per day.

Rates for East of Suez tumbled by $30,000 per day to be at $75,000 per day because of extra cargo and fuel costs stemming from having to take longer delivery routes around the Cape in South Africa,

Charter demand has also been seriously affected because clauses in time-charter agreements exclude the deliberate entry into “war zones” that would affect hull, cargo and crew insurance.

LNG carriers from Qatar are continuing to use the Suez Canal and one that has just delivered to Italy’s Adriatic LNG import terminal was well on its way back to Ras Laffan.

Vessels carrying LNG from the Atlantic Basin via Suez had been less frequent before the crisis and are not expected to be re-using the Suez route anytime soon.

Containership costs soar

An example of the shipping chaos in terms of financial costs are the measures and cost adjustments having to be taken by companies like France’s Marseille-based group CMA CGM, which runs one of the largest containership fleets and many of whose vessels are powered by LNG.

CMA CGM has been forced to raise its tariffs for customers because of the Red Sea and Suez Canal shipping disruptions caused by terrorism and those on the Panama Canal caused by drought.

CMA CGM is one of the groups that has halted its ships from entering the Red Sea, and thus the Suez Canal, because of the dangers of terrorist missile attacks from Iran-backed Houthi rebels in Yemen.

One of the company’s vessels, the “CMA-CGM Jacques Saade”, the world’s first LNG-powered very large containership with 23,000 twenty-foot equivalent unit containers, normally travels to and from Asia via the Suez Canal on the Asia trade route.

The vessel was heading for the Moroccan port of Tangiers on December 21 after travelling from the East Mediterranean just after the company stopped using the Suez Canal that took its vessels past Yemen on the Red Sea route.

“In continued efforts to ensure the safety of our crew, vessels, and your cargo amid the ongoing developments in the Red Sea region, we would like to provide you with important information regarding the re-routing of several vessels from their intended route to through the Cape of Good Hope (South Africa),” said CMA CGM.

“As highlighted in our previous Customer Advisory, the re-routing of these vessels is a precautionary measure taken to navigate away from potentially unsafe areas,” explained the company.

“This decision is in line with Clause 10 of our Bill of Lading, and while we understand it may impact your logistics and supply chain operations, it is a necessary step which comes with a cost,” stated CMA CGM.

Red Sea ports

“Accordingly, we hereby inform you that, effective immediately and until further notice, a Red Sea Charge will apply to all cargo to and from Red Sea ports unless you decide to accomplish the Bill of Lading at the designated hub ports,” the company explained.

The Red Sea Charge details are as follows: US$1,575 per 20-foot Dry, $2,700 per 40-foot Dry and $3,000 per Reefer container and special equipment.

The scope of these charges relate to routes for already-agreed cargoes that traditionally past Jeddah, the Port of Neom, Djibouti, Aden, Hodeidah, Port Sudan, Massawa, Berbera, Aqaba and Sokhna

“The date of application is December 20th, 2023 for cargo on board or to be loaded/ discharged to/from Red Sea, said the company.

Panama Canal

The company also informed its customers in November 2023 that the severe drought and further transit restrictions affecting the Panama Canal had taken a “severe toll” on operations so that consequently CMA CGM prices had to be increased from January.

The company noted that during the year, and despite several water conservation measures, the Canal draft was reduced from 14.94 metres to 13.41 metres (44 feet).

“The lack of precipitation over the summer months has forced the Panama Canal Authority to reduce the number of vessels transiting per day,” CMA CGM explained.

“As a consequence, by January 1st 2024, the booking windows for transiting the Neopanamax locks will be reduced by 30 percent,” said the company.

“These restrictions combined with an increase in the Canal Tariff implemented earlier in the year, are taking a severe toll on CMA CGM’s operations,” stated CMA CGM.

“Therefore, please note that CMA CGM will apply a US$150 per Twenty-Foot Equivalent unit (TEU) Panama Adjustment Factor starting on January 1st, 2024,” the company told customers.

Qatar’s main shipping repairs and offshore construction facility, Nakilat-Keppel Offshore & Marine (N-KOM) located near the main liquefied natural gas production and shipping base of Ras Laffan, is rebranding itself into Qatar Shipyard Technology Solutions (QSTS).

Winterthur Gas & Diesel (WinGD), headquartered in Switzerland, said WinGD’s latest generation of X72DF-2.1 engines will power 25 vessels as part of the QatarEnergy’s North Field East (NFE) project, the biggest LNG carrier newbuilding project in history.

Gaztransport and Technigaz (GTT), the French designer of maritime liquefied natural gas storage tanks, has signed a global Technical Services Agreement with  Qatar Gas Transport Co., also known as Nakilat.

GTT said the agreement would provide GTT’s technical support for Nakilat for maintenance and operational support for 26 of its vessels.

The 26 Nakilat ships are equipped with GTT storage tanks, either the Mark III technology or the No. 96  tanks.

This agreement includes GTT on-site technical assistance for inspection, maintenance, repairs, operations and engineering services.

Nakilat will also benefit from access to the HEARS emergency hotline, which enables ship-owners and their crews to contact GTT’s experts 24/7 to respond to operational issues.

“We welcome the signature of this agreement with our partner Nakilat, which owns and operates a large fleet of vessels equipped with our membrane technology,” said Philippe Berterottière, Chairman and Chief Executive of GTT.

“Our tailor-made support services, adapted to our customers’ requirements, allow us to guarantee maximum efficiency and safety for vessels in operation,” stated Berterottière.

In its full-year earnings Nakilat recently posted consolidated net profits of 1.35 billion Qatari rials ($372 million), an increase of 16.7 percent compared with 1.16Bln rials earned in 2020.

During 2021, the Covid-19 global pandemic continued to create very challenging and volatile conditions across the global shipping industry.

However, with long-term strategies in place, Nakilat managed to post annual revenues of 4.14Bln rials ($1.14Bln), a rise of 3.1 percent.

Nakilat at the start of 2022 also teamed up with the American Bureau of Shipping, the US classification society, to develop a decarbonization strategy.

Nakilat’s project team worked closely with ABS sustainability specialists to map out decarbonization pathways for the company’s overall fleet of 69 LNG carriers and four Very Large Gas Carriers.

In addition to this partnership with ABS, Nakilat was also leading a working group with its joint venture partners to ensure global fleet operations meet with emissions targets under regulations passed by the International Maritime Organization.

The Society for Gas as a Marine Fuel (SGMF) has released its most detailed version yet of a publication of operational guidelines to enhance safety during the marine bunkering of LNG fuel.

The SGMF said this third revision of “LNG as a marine fuel - Safety and Operational Guidelines - Bunkering” is the most comprehensive coverage of all aspects related to LNG bunkering operations.

“The maritime industry is increasingly adopting LNG as the fuel of choice for newbuild vessels,” said the Society.

“Together with the environmental performance LNG use provides, this growing trend is also the result of the considerable expansion of the LNG bunkering supply infrastructure,” it added.

“Facilities are now well established in most parts of the world, and there are more operational LNG bunkering vessels serving the industry than ever before,” stated the SGMF.

In anticipation of this growth and beyond, the safe use of LNG as a marine fuel has been a priority issue for SGMF.

Insights

“The information contained in this publication is gold dust for anyone bunkering an LNG fuelled ship,” said the Chairman of the SGMF Samir Bailouni, who is also Chief Operating Officer of Qatari gas shipping line Nakilat.

“These practices and insights are collated from the best the industry has to offer, and I extend my thanks to our members for providing this invaluable information not only for the benefit of the industry, but for society as a whole,” stated Bailouni.

The first published version of the SGMF’s LNG bunkering guidelines was in 2014 and it has now been “significantly updated and revised for 2022”.

The SGMF said the guidelines are recommended by the society as a “must have” for anyone engaged with any aspect of LNG bunkering.

“The safety track record of LNG bunkering operations has been exceptional and SGMF has played a leading role in developing a ‘safety first’ approach to bunkering operations through its publications, work, and influence,” declared the SGMF.

The SGMF noted that among its membership organisations there were tens of LNG bunkering ships operating with hundreds of ships using LNG between them and with LNG bunkering occurrences now in their thousands.

The publication covers not only actual operations, but also the actions and activities leading up to that final stage, making the bunkering efficient and safe.

“The overall aim of this new publication is to ensure that gas-fuelled ships can be bunkered safely, reliably, efficiently, and in an environmentally responsible way,” said Mark Bell, General Manager of the SGMF.

“The industry now has a comprehensive portfolio of publications for LNG as a marine fuel and the Society will continue to update them with good, if not the best, practice the industry has to offer,” he added.

Nakilat, one of the world’s largest LNG shipping operators, has partnered with the American Bureau of Shipping, the US classification society, to develop a decarbonization strategy.