A spotlight on price, demand outlook, developments in LNG bunkering, and construction in the LNG shipping & terminals sectors
Short-term outlook
Howe Robinson Partners weekly report noted LNG spot rates are down slightly on the week before, but no general direction was discernible as there was an absence of downstream demand.
Long-term outlook
In a recent equity research paper, Jefferies International Ltd reported that 2024 will be the last year of global LNG market tightness. Based on its demand forecasts (~4% CAGR 2022-30), the market will be balanced in 2025 and shift into a loose market in 2026. The firm believe while the high-price environment has damaged medium-term demand growth prospects, natural gas is important to the energy transition and as a substitute for coal as prices come down.
Newbuildings
Lloyd’s Register (LR) is to class a first newbuild project for mid-size low pressure ammonia-ready LCO2 carriers ordered by Capital Gas Ship Management at Hyundai Mipo Dockyard. The project follows a collaboration between Capital Gas Ship Management (Capital), Hyundai Mipo Dockyard (HD HMD), and LR.
Capital, HD HMD, and LR will work together to construct two 22,000-m3 low-pressure LCO2 carriers, with the capability to carry liquid petroleum gas and ammonia with ammonia dual-fuel readiness to be delivered in 2025 and 2026.
The two new carriers will be developed for Capital’s gas carrier fleet, and when built, will transport liquefied carbon dioxide (CO2) under pressure. The 22,000-m3 design will allow CO2 from the carbon capture and storage process to be transported to storage facilities in larger quantities for sequestration or further use.
The vessels will be equipped with IMO Type C storage tanks which feature lighter scantlings that maintain the tanks’ structural integrity. This innovation allows an upscale in the size of the LCO2 carrier, improving storage and transport, something shipbuilders were not able to do with more conventional materials.
LNG bunkering
New LNG production and marine bunkering capability is being developed at Port Hedland, Western Australia. The goal is to achieve zero emissions according to the IMO 2050 standards through onboard hydrogen production. Three companies are collaborating on this initiative.
Pilbara Clean Fuels (PCF) aims to establish an electrified liquefied natural gas plant in Port Hedland. The purpose of this plant is to produce LNG marine bunker fuel.
Oceania Marine Energy (Oceania) is working on the development of a marine fuel bunkering business. It will use purpose-designed LNG refuelling vessels chartered from Kanfer Shipping, Norway.
RINA has an innovative concept for an LNG-fuelled ship design. The 209,000-dwt Newcastlemax dry bulk carriers incorporate precombustion carbon removal and hydrogen production. This design aligns with the IMO 2050 Carbon Intensity Index (CII) requirements.
The collaboration between PCF, Oceania and RINA has been formalised through an MoU. The shared objective is to conduct studies to determine the commercial and emissions-reduction benefits of the combined concepts with a focus on the Pilbara to Asia dry bulk minerals export trade route.
PCF is actively progressing the development concept of a new low-carbon footprint LNG plant in Port Hedland. This plant will provide Australian LNG fuel supply capabilities. It will convert pipeline natural gas to LNG in response to the growing demand for cleaner marine bunker fuel for dry bulk iron ore carriers operating between Pilbara and Asia.
The LNG refuelling concept involves ship-to-ship bunkering while vessels are anchored off Port Hedland. Oceania is spearheading the development of the LNG marine bunkering business.
Terminals
NextDecade Corp and Bechtel Energy Inc’s Rio Grande LNG facility (RGLNG Phase 1) has reached a significant milestone with the construction of RGLNG Phase 1 in Brownsville, Texas
With three liquefaction trains and supporting infrastructure, RGLNG Phase 1 is believed to be the largest greenfield project financing in the United States.
ABB Energy Industries has been entrusted with the delivery of integrated automation, electrical, and digital solutions for RGLNG Phase 1.
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