LNG

Nov 24 (LNGJ) - Japanese shipping company Mitsui OSK Lines, whose “energy business fleet” includes over 150 tankers for oil and other products and about 90 LNG carriers, reported higher profits and revenues for the first six months of the year. Revenues in the energy shipping division, one of five in the MOL Group, amounted to 214.9 billion yen ($1.43Bln), up from 189.1Bln yen in the same six months last year. Net profits increased to 37.6Bln yen ($252M) from 22.1Bln yen in the prior-year period.

   Takeshi Hashimoto, President and Chief Executive of MOL, said he was very pleased with the results for the first six months to the end of September. “We accumulated profits in the energy business and car-carrier business, both of which are the strengths of the MOL Group,” Hashimoto explained. “Performance in the first half exceeded forecasts as a result, and with the weaker yen also expected to have an impact on profits in the second half, we have raised the forecast for second-half profits to 220Bln yen ($1.47Bln),” Hashimoto added.

Japanese shipping company Mitsui OSK Lines has presented its annual update on activities, praising the role of the LNG fleet as it cemented its position as the world’s third-largest shipping group behind Japan’s NYK Line and the giant Chinese company COSCO Shipping.

The overview from President and Chief Executive Takeshi Hashimoto was contained in the updated presentation called “Blue Action 2035”, involving an initial first phase of 1.2 trillion yen ($8 billion) in investments.

“To date, the group has worked to strengthen its LNG carrier business and offshore business to increase the ratio of stable earnings,” Hashimoto explained.

“In particular, MOL’s LNG carrier business has grown to become one of the world’s leading businesses in terms of both scale and competitiveness,” he added.

Long-term contracts

“Furthermore, the group intends to increase the asset allocation to areas within the shipping industry where long-term contracts can be obtained, such as crude oil carriers and liquefied petroleum gas carriers, as well as to businesses different from industrial cargo transport, such as domestic ferries and cruise ships, and to land-based businesses such as real estate property and warehouses,” the CEO explained.

“We aim for the best mix of businesses that can resist recession, maintain stable dividends, and enjoy large profits when market conditions are favorable, by striking a good balance between market driven businesses such as containerships, which offer high returns but also large fluctuations in earnings and stable revenue businesses such as LNG carriers and real estate,” Hashimoto declared.

“The opportunity to enjoy unexpected profits over a long period can be said to be an attractive feature of the shipping business,” said the CEO.

“On the other hand, however, considering the huge capital investment required for consistent fleet renewal to continue the business, the company cannot solely rely on this irregular economic boom,” he added.

Hashimoto stated that while the shipping business would continue to be the core of the group and a source of “competitive advantage that generates high returns during market boom” MOL would also be looking to diversify and invest in other businesses to help stabilize the earnings base. 

LNG stability

MOL said that LNG continued to be a “stable revenue business” while containerships was a “market driven business” along with the car-carrier fleet.

MOL said it was currently the third-largest global shipping company with a fleet of799 vessels, just behind Japan’s NYK Line with 800-plus vessels, though well behind Chinas COSCO Shipping with around 1,300 vessels

Hashimoto noted thatLNG shipping was rapidly increasing around the world as an environmentally friendly and clean energy source.

“Since first participating in LNG transport in 1983, we have accumulated considerable expertise in this field, and boast the world’s leading share in the ownership, management, and operation of LNG carriers,” he stated.

In what it called its “energy business fleet”, MOL currently has 367 vessels operating, including 158 tankers for oil and other products and 94 LNG carriers and more than 30 other gas carriers including floating storage and regasification units, ethane carriers and LNG bunkering vessels.

“We have also entered the business of transporting ammonia, which is attracting attention as a next-generation clean fuel that does not emit CO2 when burned,” noted Hashimoto.

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.

Nov 25 (LNGJ) - Mitsui OSK Lines President and Chief Executive Takeshi Hashimoto said that his shipping company planned to order up to four LNG-powered cruise liners to expand into that market, where it only has one ageing and conventionally-fuelled ship. “We will build two ships at first, and if things go well, we are thinking of expanding to four,” said Hashimoto.

   MOL has an LNG carrier fleet and is a global leader in containerships through Ocean Network Express, owned jointly with Nippon Yusen Kaisha (NYK) Line and K-Line and has been enjoying healthy profits. “Our options have expanded greatly and cruise ships is a field that is growing in Japan and our rivals are luxury hotels and Japanese inns. We can also expect inbound demand from foreigners,” said the MOL CEO.

Mitsui OSK Lines (MOL), the Japanese shipping company with an operating fleet of almost 100 liquefied natural gas carriers, said it would use cash flow from the energy transportation boom to invest in a huge fleet of LNG-powered vessels of all types rather than wait for any future fuels.

The company, involved in all shipping sectors from oil tankers to car carriers and containerships, said it planned to launch 90 LNG-powered vessels by 2030 and has already announced an order for four car carriers.

“Strong demand for shipping services has given us more freedom on management decisions,” said MOL President and Chief Executive Takeshi Hashimoto in an interview with the Japanese financial daily newspaper Nikkei.

“The stepped-up investment will speed Mitsui OSK's shift towards LNG-powered vessels, which emit 25 percent less carbon-dioxide than ships running on conventional fuel oil,” stated Hashimoto.

Hashimoto noted that Mitsui was also investing in “green ammonia” as a key carbon-free fuel source for the future.

However, while ammonia is expected to start powering real-world vessels in the late 2020s, import limitations may pose a challenge for Japanese shipping companies.

“We don't have enough volume to use ammonia to fuel ships,” declared Hashimoto.

Can't wait

“We can't afford to wait for somebody else to produce the material,” he added.

The company announced in May 2021 that it would resume transporting ammonia for the first time in half a decade.

MOL will consider producing and exporting ammonia derived from natural gas.

“We will look into ammonia-related mergers and acquisitions as well,” he added.

MOL is making the LNG-powered shipping investment in response to growing demands from the logistics sector to reduce carbon emissions.

Volkswagen, for example, requires shipping companies to be using LNG-powered vessels to even bid on a contract.

Japan’s Honda Motor is also urging key suppliers to reduce emissions by 4 percent every year.

Another Japanese shipping company Nippon Yusen Kabushiki Kaisha (NYK) has already revealed plans to replace 100 of its 215 large and midsize bulk carriers, as well as 30 to 40 of its 117 car carriers, with LNG-powered vessels by 2030.

“We'll be able to put in a few hundred billion yen into this soon thanks to improvements in our performance,” said NYK Line President and CEO Hitoshi Nagasawa.

French energy major Total and Japanese shipping company Mitsui OSK Lines have attended a naming ceremony in the Dutch port of Rotterdam for the “Gas Agility”, the world’s largest LNG bunkering vessel.