Upload
noelgamboaylopez
View
936
Download
8
Embed Size (px)
DESCRIPTION
For full report email [email protected]
Citation preview
2012
[LNG REPORT 2012]
Emmanuel Gamboa, Power & Utilities – Executive Search [email protected]
+639285052983
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 1
III. LNG Shipping Fleets and Costs a. LNG Shipping Fleet & Vessels
i. How many ships for a project?
Determine Annual LNG
Demand Liquefaction Capacity Plant Availability
Calculate No. Of
Cargoes Ship Size
Determine Ship
Arrival frequency
Planned Maintenance
Calculate No. Of
Ships
Destination Ports
Trade Split
Ship Journey Times
Offload port delays
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 2
Determining No. of Ships for a Project
EXAMPLE:
DES project Nigeria to UK
• Liquefaction train = 4Mtpa - Equates to max daily production of 12,000 tonnes over 330 days annual operation • Will consider use of 155,000cbm standard vessel sixe - A 155,000cbm vessel delivers 150,476cbm cargo • Round trip takes 12.5 days • How many ships
ii. LNG Shipping 1. Developing History
• The ship ever classified as “liquefied gas carrier” was Methane Pioneer in 1958 • Traditionally, LNG gas carriers were funded and built for single projects,
balanced with 20-‐25 years take-‐or-‐pay sales contracts • Japan and Korea created their own LNG ship building industries through
imposed FOB supply imported using their own tankers China has recently begun to adopt similar thinking in developing contracts Malaysia policy was to export LNG only on ex-‐ship (CIF) basis and reserved
all shipping for Malay flagged vessels India has recently done the same for imports.
• The LNG marine industry is growing and changing
iii. The Modern LNG Fleet: 1. Growth
o 1998: it had taken 34 years to reach 100 vessels in service o 2006: 200 vessels in service o 2008/9: will reach 300 vessels in service o Estimated 326 vessels needed in 2010 o Potential dangers as all parties assume safety in the “norm” and that
relevant skills will be available.
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 3
2. Modern LNG Fleet (by type) – at 27 April 2012
LNG Carrier Fleet By Type
LNG CARRIER FLEET BY TYPE Type Delivered On Order Conversion Total Ship 363 70 0 433 FPSO 0 1 0 1 FSRU 7 6 1 14 RV 7 0 0 7 Total 377 77 1 455
Source: Platou LNG
The fleet has grown rapidly to meet the increases in trade rising from just under 5 million TEU at the end of 2000 to 14.28 million TEU at the end of March 2011.
3. Development of World Container Fleet Capacity: 2000 to 2011 (Million TEU — End of Period)
Source: Drewry
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 4
4. LNG Fleet Age Profile
Global LNG Fleet by AGE, 2011 (Number of Carriers, % of Total)
iv. World LNG Shipping:
1. Sufficient ship building capacity to meet projected demand?
• Probably only about 15 world shipyards capable of building LNG tankers • Only about 8 established shipyards currently build LNG tankers
- 3 major yards in Japan - 3 in Korea - 2 in Europe - 1 now in China
Plus: - 2 new yards in Japan - 2nd possibly in China - And, Russia, India & Poland soon?
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 5
2. LNG Orderbook , LNG fleet development and Forecast
3. LNG Shipping Process
4. “Retirement and New Builds
• Due to increased safety and environmental controls there about 55 to 62 older tankers that will be retired up to 2014, as they become less commercially uneconomic - Some will be converted into FSRUs
• We are now seeing swelling orderbooks at the South Korean shipyards but the current orderbook of 56 vessels will not meet projected need
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 6
• This is mostly driven by increasing Asian plants and demand - New Australian plants alone will need additional 40 to 45 vessels to 2015 - New “special” vessels for Yamal LNG also
5. Structure
• Contrary to the trend in more traditional shipping markets (e.g., oil tankers, bulk carriers), the O&G majors and state enterprises tend to be more directly involved in LNG shipping - 44% of fleets is owned by O&G majors and state enterprises
• Independent owners and international companies are re-‐emerging as significant players - Among private owners, 55% are South Korean or Japanese shipping
corporate - About 33% of new order book is for independent ship-‐owners with around
21% being Japanese and 24% being Korean. - Now we are seeing independent Greek and Scandinavian companies
entering LNG taner market with new builds. - O&G majors account for about 12%
6. Shipowner process
• Ships can be owned by LNG sellers (directly or by special purpose company), or by buyers or independent third parties who charter vessels out to LNG buyers & sellers.
• Shipowner must consider several factor before ordering a new build LNG tanker - Financing (usually project financed via banks) - Shipyard quoted prices - Shipyard “slot” availability - Cargo containment system required - Standard or “ice-‐class” - Etc.
• Shipowner reviews all such specification with the classification societies (Lloyds, ABS, etc.), the shipyards and the equipment providers to allow yard selection, usually by competitive tender process.
• Shipowner generally has a supervision team onsite at the shipyard throughout the construction process to ensure that vessel is being build to agreed specification.
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 7
7. Vessel Safety
• Today, LNG tankers safely transport more than 220 million tons per year to ports around the world - One LNG tanker enters Tokyo Bay every 20 hours - One LNG cargo enters Boston harbor every week
• Outstanding safety records, but why? - Continuous improvement in ship technology & maintenance - Continuous improvement in ship safety equipment - Comprehensive safety procedures and training - Effective government regulation and international oversight
• SIGGTO – Society of International Gas Tankers and Terminal Operators
8. Vessel Design basics
• Double-‐hulled tankers/ gas carriers - From first one unlike oil tankers
• Traditionally driven by stem propulsion - Use of LNG Boil-‐off gas
• LNG cargo contained in protective, cryogenic “tanks” within inner hull - Broadly, 2 types of gas carrier vessel based on LNG tank design
• Enhanced equipment to support safe ship handling • Sophisticated leakage detection equipment and emergency shutdown systems
9. Containment and Boil-‐off Gas
• LNG is carried - As a boiling liquid at approx -‐160 centigrade - In non-‐pressurized tanks
• LNG cargo is boiling therefore it continually produces vapor (Boil-‐off Gas – BOG) - Mostly used as propulsion fuel - Can be re-‐liquefied
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 8
Boil off Gas used as Propulsion Fuel
Source:BrighthubEngineering
Boil off Gas re-‐liquefaction
Source: CNOOC Fujian LNG
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 9
10. “Moss” Containment
LNG is stored in a numbers of self-‐supporting, aluminum spherical tanks fixed within the hull
LNG cargo system is separate such that any contraction/ expansion is not passed to the tanker hull.
11. “Membrane” Containment
• Standard tanker consists of 4 separate LNG “holds” • Insulating material is applied to the ships inner hull • Membrane applied to ensure liquid tightness
Source: epd.gov.hk
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 10
12. Containment Design – Advantages & Disadvantages
Key selection issues
• Capacity/ filling limits • Weight • Complexity of manufacture • Cost • Size/ terminal compatibility
Self-‐Supporting Tanks
• Tank: Heavy rigid metallic. • High material and Fabrication cost. • Tank capacity: 125,000 m³ • Ship tank material weight: 4,000 tons • Insulation: Non-‐load bearing. Relatively cheap.
Membrane Tanks • Tank: Specialized light construction • High material and fabrication cost • Tank capacity: 125,000 m³ • Ship tank material weight: 400 tons • Insulation: Rigid load bearing over whole surface. Relatively expensive.
Source: Shell Global Solutions
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 11
13. Current Fleet by Containment Design Type
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 12
14. What is Storage Tanker Roll-‐over?
Natural convection causes circulation of the LNG within the storage tank, maintaining a uniform liquid composition. The addition of new liquid, however, can result in the formation of strata of slightly different temperature and density within the LNG storage tank. "Rollover" refers to the rapid release of LNG vapors from a storage tank caused by stratification. The potential for rollover arise when two separated layers of different densities (due to different LNG compositions) exist in a storage tank.
Source: www.igu.org
Note: ship tanks only fill from bottom
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 13
v. LNG Fleet 1. Tank Roll-‐over?
• It has been generally considered that “rollover” in cargo tanks was not a major issue, although cargoes with high nitrogen content are more prone
• However, an incident has been reported when a vessel with substantial LNG heel (~5400m³) consolidated into only 2 tanks loaded a higher density LNG below the heel - Original cargo (& heel) was of lean LNG from an Atlantic Basin terminal - New cargo loaded was rich LNG reloaded from an SE Asian terminal - Important to remember that ship tanks only fill from bottom
• The first tank roll-‐over occurred 5 days after loading and second tank rolled a day later - Whilst there was reported rollover in both ship tanks causing a noticeable
rise in tank pressure there was no uncontrolled BOG release
2. “IHI SPB” Containment
Special design prevents sloshing damage which can occur in membrane tanks Most expensive containment system Main potential is for Floating LNG Production and FSRU applications
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 14
3. LNG Tankers of various Types and Sizes
Moss Type
• 4 Tanks
• 5 Tanks
• 6 Tanks
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 15
Membrane
• Large
• Small
• 3 Tank Moss
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 16
Other Types
• Pressurized
• Prismatic
• Conch
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 17
4. Standard Ship Size
1970-‐2002
• 130-‐140,000m³ • Limitations
- Japanese maximum displacement, 105,000 dwt - US maximum draft, 11.3 m.
• Conservative designs 2002-‐2006
• 140-‐153,000m³ • Limitations
- Japanese maximum displacement, 105,000 dwt - US maximum draft, 11.3 m.
• Optimized designs - Larger ships, same constraints
5. Vessel Size has increased
2007
• A new generation of LNG tankers arrived to transport the output of the large Middle East “mega-‐train” projects to long haul markets in USA and Asia 1. To extend the reach of existing commercial ventures in other distant
supply centers 2. Fewer transits with reduced fuel costs
• Vessel Size for its economies of scale are critical for this new strategy to achieve equivalent or lower delivered cost - Increase from 138,000 to 220,000m³ vessel size can reduce cargo
delivery costs by up to 45% • 54 Q-‐flex and Q-‐max vessels now operating equaling ~20% of global fleet
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 18
Growth in Capacity of LNG Carriers
Source: Short History of Shipping, Peter G. Noble
125,000m³ (MOSS)
145,000m³ (MEMBRANE)
200,000m³ (MEMBRANE)
250,000m³ (MEMBRANE)
LNG Cargo Tanks 4 4 5 5 Length (overall) m 285 289 313 345 Beam (m) 44 43.4 50 54 Loaded Draft (m) 11 11.4 12 12 Ballast Draft (m) 10 9.7 9.9 10.3 Deadweight tonnes 69,000 72,000 100,000 120,000 Displacement (loaded) tonnes 97,800 103,000 140,000 174,000 Boil-‐off Rate % per day 0.15 0.15 0.14 0.13 Max. Loading Rate (m³/hr) 11,000 13,000 16,000+ 16,000+ Manifold dia inches 16 16 20 20 Propulsion Power MW 26 MW 27 31 34
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 19
Against Bigger ships • Draft and its relationship with LOA & Beam size is the issue for Moss tankers
- Must have loaded draft of 12 meters or less - Suez canal - Limited terminal access
• Terminal loading and unloading lines and arms limited typically to 10,500m³/hr • Commercial contracts require a turnaround of 24 hours so a 138,000-‐155,000 m³
LNG ship unloads in 12 hours • A 216,000m³ ship takes 21 hours to unload
Increasing size = increased design problems
• Regarding “sloshing”, particularly for Membrane tankers. • Possibility to put in 5th tank per vessel but then cost goes up due to associated
equipment • The sloshing phenomena occur when the ship motions coincide with the natural
frequency of the liquid motion in the tanks. The build-‐up of violent motion is due t frequency, not amplitude.
Increasing size = new propulsion systems • Increasing size is driving consideration of new more complex and efficient
propulsion methods (away from single screw, steam turbines) - Single screw slow speed diesel - Twin screw, lean burn diesel electric - Twin screw, diesel electric coupled with re-‐liquefaction units to limit boil-‐off - 4 stroke diesels using boil-‐off gas as a dual fuel - Gas turbines
• Choice of propulsion system is highly correlated to - Commercial drivers (fuel saving vs. maintenance) - Type of trade (point-‐to-‐point, short voyage, long distance voyage or merchant) - Experience of shipping company
6. Changing propulsion trends:
Environmental pressures on LNG carriers
FUEL NOx SOx CO2 Steam Turbine HFO + LNG 200 2,400 180,000 Low Speed Diesel + re-‐liquefaction HFO 3,950 1,800 120,000 Dual fuel electric LNG only 240 0 100,000 Gas turbines and COGES LNG only 850 0 108,000 Note: Emissions shown in tones/ year/ ship Source: ALSTOM
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 20
• In 2003, with exception of 3 very small vessels, ALL were steam turbine driven, burning combinations of BOG and Heavy Fuel Oil (HFO).
• Now, around 40% of new vessels on order are for diesel (Diesel Fuel Diesel Electric) driven ships - DFDE vessels cannot burn BOG/ HFO fuel combination - New Q-‐flex and Q-‐max vessels now use slow speed engines burning HFO
only • Gas turbine units have fuel efficiency of 38-‐40% compared with 28% for
steam turbines - Plus, would use “light” gas instead of “heavy” bunker oil as fuel.
• Qatar’s Nakilat is reported to be considering changing all its 45 tankers (including Q-‐flex and Q-‐max) to run only on LNG gas fuel
• Should they decide to go ahead with this plan the tankers will be converted during 2012 to 2015
• Shipping brokers and analysts say the refit programs and consequent idling of Qatari tonnage will push day-‐rates on LNG carriers even higher as they will have to charter in other tankers to cover during refit period.
Other design development
• New advanced containment designs for both Moss and Membrane tank carriers
• On-‐board re-‐liquefaction facilities for cargo retention on new Qatari vessels
7. Vessel size has also decreased
Coral Methane
• The first Polish built LNG carrier was launched on may 7, 2008, at Gdansk based Stoczina Polnocna SA (Northern Shipyard), member of REMONTOWA Group - Diesel/ gas electric driven - Can carry a variety of gas cargoes; liquefied natural gas (LNG), liquefied
petroleum gases (LPG) or ethylene - Ice class 1B - Cargo capacity 7,500m³ - Length over all 117.80m; breadth 18.60 m; draught 7.15 m
8. Technological Change
“Cold Weather” needs
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 21
• More severe weather conditions – ice and waves - Sakhalin – “winter-‐ising” the vessels - Snohvit/Shtokman/ Barents Sea – “artic-‐ising” the vessels
• Requires greater thickness (ice) and more cryogenic steels for hulls • Requires strengthened propellers, and protection
Ice-‐class
• Sovcomflot - Energy shipping company - One of most modern and youngest world fleet - Specialist in ice-‐class vessel and extreme cold operations - Took delivery of 2 tankers at end of 2007 ex Japan for Sakhalin 2 project
to travel to Japan & elsewhere on 20 year charter 145,000m³ Moss containment Ice-‐class
• Russia - Reported that Russia will require 30 LNG tankers by 2020 to transport
~25Mtpa from existing and new export plants Shtokman LNG will need 12 new vessels Yamal LNG will need 12 new vessels; new design for large-‐scale,
year around Arctic export …….. Very large, ice-‐class with Moss tanks
Others will need ~6 new vessels - Many, if not all, of these vessels to be built by Russian United
Shipbuilding Yards – agreements with Korean shipyard and with French Technip for technology transfer
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 22
9. LNG Transfer at Sea
Two vessels moored together LNG transferred using flexible hoses (6,000 m³/h) Benign conditions required Allows maximization of Exelerate Energy, Energy Bridge vessels Ataris testing transfer from their Q-‐flex & Q-‐max vessels to smaller tankers
• Maximization of Exelerate Energy business model • The Problem….
- Tugs: Much smaller than LNG carriers. Work beam on to waves
10. Tandem Unloading
• LNG (un)loading at wave heights up to 5.5 m (18ft) • Considerable design work performed by individual companies and through JIPs
- Model testing completed - Products “commercially available” - Needs a project to develop further
• LNG tankers would need modification so would have to be dedicated to a specific trade
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 23
11. Hoses
• Considerable work being done in the industry to develop and commercialize large diameter cryogenic LNG hoses for (un)loading - Designs focusing on (un)loading in wave heights of 4.5-‐5.5 m - Floating and sub-‐surface versions being developed from aerial hoses
12. LNG Shipping Experienced personnel – a serious challenge
Number of officer on a LNG carrier
• Deck officers = 5 (including Cargo) • Engineering= 5 (including Cargo) • Total Officers = 10
Estimate of new required officers to meet shipbuild
• 143 x 10 x 2.5 = 3,575 • Senior officers = 2,145 (60%) • Junior Officers = 1,430
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 24
b. LNG Shipping Logistics & Costs
i. Basic Commercial Models
• Free on Board (FOB) - Title to the LNG cargo transfer to buyer at loading and buyer has responsibility for
shipping • Cargo, Insurance & Freight (CIF)
- Title of LNG cargo can transfer during the voyage (high seas) or delivery and the seller is responsible for shipping; complex liabilities as buyer is responsible for cargo but seller responsible for shipping.
• Delivered Ex-‐ship (DES) - Title transfers on unloading and seller has responsibility for shipping
ii. Control of Shipping
• For LNG sellers, control of LNG shipping is a core “value chain” issue to ensure loading schedules are tuned to production activities - Shutting in or slowing LNG liquefaction needs to be avoided.
• Control of shipping does not necessarily require ownership or operation – both short and long term charters provide sufficient controls - Having the ability to “tune” an FOB ship loading schedule and the “heel”
management of vessels provides sufficient control in most cases - This “tuning” facility does however require some contractual changes to the
apportionment o shipping & commercial liabilities.
iii. Long Term LNG Charter Contracts
Traditionally:
• Newbuild vessels constructed to meet the requirements of a specific project • Long duration charter period (typically 15-‐25 years) • Fixed or relatively fixed hire
iv. Risks to Owner and Charterer
• Owner - Technical/ Operating Risk - Non-‐performance by the charterer
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 25
• Charterer - Technical/ Operating Risk - Non-‐performance by the owner - Market risk
v. LNG Charter Terms
• The owner is responsible for the operation, maintenance and performance of the vessel • The technical operating/ “breakdown” risk is shared between owner and operator
- Of hire and exceptions provisions typically excuse charterer from paying hire but owner not obliged to provide alternative vessel or pay damage
- If repeated/ serious failure to perform owner’s obligations, charterer may have right to replace vessel operator or take vessel under a bare-‐boat charter
vi. Allocation of Costs or Who Pays for What
Type of Charter Shipowner Ship Charterer Spot or single voyage Capital, operating, voyage None Consecutive voyage Capital, operating, voyage None Contract of affreightment Capital, operating, voyage None Period of Time Charter Capital, operating Voyage Demise or bareboat Capital Operating, voyage Source: Drewry Maritime Research
• Allocation of costs depends on the nature of the shipping contract • The shipowner aims for a minimum charter hire rate, at which costs (including an allowance for
a target %age rate of return on investment capital) will equate to revenues. - This minimum rate differs according to the type of charter contract employed, because the
owner’s costs differ according to the type of charter contract employed
vii. Basic Economics
Breakdown as:
• Capital Costs (fixed costs): purchase of vessel consist of ship owner equity plus bank financing interest
• Operating Costs (variable non-‐trading): vessel costs unrelated to trading consist of crew, insurance, repair & maintenance, stores, spares, lubes, etc.
• Voyage Costs (variable trading): directly related to trade consist of bunker fuel, port & canal costs.
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 26
viii. New Build Capital Costs
• LNG tankers are the world’s second most costly merchant vessels after very large cruise liners - Similar degrees of sophistication to build process
• LNG tankers are by far the most expensive type of cargo vessel, costing two to thre times the price of an oil tanker of similar tonnage.
• New LNG tanker average capital cost is ~$200-‐300million for Q-‐flex and Q-‐max vessels and ~$180-‐190 million for 155,000m³ - Steel costs have risen rapidly over recent years - New technologies - New propulsion systems
ix. ECONOMICS 1. Newbuild Prices
Newbuilding Price (Conventional LNGC)
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 27
Note: More than x2 cost of equivalent sized Oil tanker which carries 4 to 5 times as much energy.
2. Operating Costs
• LNG shipping costs are largely determined by daily charter rate • There are no set rates for LNG tankers as there are for Oil tankers
- Charter rates vary widely from ~$27,000-‐$150,000 per day • Average long-‐term charter rate is seen as $55,000-‐$65,000 per day • Short-‐term (spot) charter rates vary with market
Conventional LNGC Short Term Charter Rate Projection
Spot & short-‐term charter rates (2006-‐Present)
• Ship trading costs vary widely and are largely depend on voyage distance - Voyage length is often is of key importance because the main voyage cost item,
beside port dues and canal tolls, is fuel or boil off (using part of the LNG cargo) to propel the ship.
• New ship technologies are helping to bring costs down and make previously uneconomical projects viable
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 28
3. Fleet Utilization
Utilization of LNG Fleet
Source: ConocoPhilips
• LNG tanker market is currently very tight with many players searching the world for tankers for short-‐term charter
-‐Many spot tankers now being used for Japan -‐ Qatar looking for tanker over next years?
• Market is forecast to remain tight for the next few years – Where are we
• Estimates are about 14% of fleet (maximum) is available at any time for Spot Market activity up to 1 year
• Spot charter rates differ between Atlantic and Asia • Current spot charter rate increasing with rates doubling in second half of 2010
reaching ~$60,000/day in winter 2010 period and now to ~$125,000/ day in late 2011
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 29
LNG Spot Charter Rates
Source: Teekay Corporation
4. Voyage Costs
• Voyage Cost Circulation from: - Market rates - Operating costs of ship - Voyage days - Waiting days - Port days - Mileage - Fuel prices - Speed & consumption of fuel - Canal, port and terminal fees
• To get: - Total cost of voyage - LNG shipping rate
5. Main Engine Bunker Fuel Prices
• Volatility of this main fuel price leads to necessity for contractual coverage (price hedging) of this.
• Market price vary with geography and are quoted monthly at Rotterdam, Houston, Middle East and Singapore
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 30
6. Additional Voyage Charges
Port Charges ($ 000) [for loading and discharging] • Trinidad/ Lake Charles 100 • Ras Laffan/ Japan 200 • Algeria 82 – 102 • Port Fontin 46 • Spain 91 – 110 • Lake Charles 31 • Bonny Island 291 • Oman Qalhat ~80
Canal Charges – About 10% of LNG trade transits though canals, nearly all via Suez at present
• Suez - Conisderable number of Middle East cargoes coming to Atlantic Basic - Charge can be up to 20cents/MMBtu - Canal Authority offers 35% rebate + “cargo incentive” up to 15% for volumes
over 2Mtpa to encourage LNG vessels? • Panama
- Can only take LNG tankers that are 100,000m³ or smaller - This <17 takers of the entire fleet - LNG transit . . . . . . . . NOT A LOT YET, but . . . . . .
x. Panama Canal Update 1. Current Development
• $5.2 billion development to be completed by 2014 - Will build 2 new large three-‐chamber locks at both the Atlantic and the Pacific
ends of the Canal
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 31
• This will allow LNG tankers up to 170,000m³ passage - Potential to open up new routes linking Atlantic and Pacific and possibility a
further 10% of LNG trade
2. Shipping Rates
• LNG tankers ply their trade around the world but there are commercial limits - The voyage costs are critical
• The LNG “shipping rate” is a major variable cost in the LNG chain which can make supply routes either profitable or commercially impossible.
Shipping Rates vary with journey mileage:
Estimated LNG Shipping Costs Alaska – Asia Pacific
Copyright © 2012 Capman Consulting – Strategic Human Resource Management 32
Estimated LNG Charter Rates and New Build Orders
Note: Rates must be based on a particular size of tanker at a specific charter rate in $000 per day
3. Netback Pricing
• Simple method (from oil markets) to track and compare the return & profitability of a particular trade
• Netting off the price back to the supply source value - Deducing regas costs and shipping costs from the market sale price gives a FOB
netback - Further deducting the liquefaction cost and feed-‐gas price gives an upstream
netback value to the producer (often involves JVs at this upstream level)