Tembek initiates the OSG LNG drive

OSG, a leading tanker owner, is about to enter the LNG sector in dramatic fashion – with a quartet of the largest LNG carriers afloat

New York-based Overseas Shipholding Group (OSG) ordered a quartet of Q-flex LNG carriers in November 2004, at the same time that Pronav contracted its four Q-flexes to serve the same Qatargas II Train 4 project. Two of the OSG ships are being built at Hyundai Heavy Industries (HHI) and two at Samsung Heavy Industries (SHI). All are 216,000m3 GTT Mark III membrane tank ships. Tembek, one of the SHI newbuildings, is poised to be the first to be handed over to OSG but all four will be commissioned within a relatively short space of time.

The OSG Q-flexes, like the Pronav ships, will carry LNG from Ras Laffan in Qatar to the South Hook terminal at Milford Haven in the UK under charter to Qatargas II. The charter runs for 25 years, but there are also two extension options, each of five years. Qatar Gas Transport Co Ltd (QGTC, or Nakilat) holds ownership stakes in all eight vessels.

Already one of the world’s largest owners and operators of tankers, OSG had been looking to establish a presence in the LNG trades when the opportunity to link up with QGTC arose. The joint venture, which is 49.9 per cent owned by OSG and 50.1 per cent by QGTC, is paying in excess of US$900 million for the four ships.

As with the Pronav ships, each of the OSG vessels is fitted with twin MAN B&W low speed diesel engines and an onboard reliquefaction plant from Hamworthy. The Q-flex propulsion system and reliquefaction equipment are described elsewhere in this issue.

OSG established an LNG business unit, with responsibility for co-ordinating the group’s new LNG shipping activities, at its Newcastle operations centre in the UK at the start of the project. Because the shipowner had no prior experience of LNG shipping operations, it has secured the services of the Isle of Man-based Dorchester Atlantic Maritime Ltd (DAML). DAML is undertaking full management of the four OSG Q-flex LNG ships; the package incorporates an extensive training programme tailored to suit OSG’s needs and the equipment fitted on board the Q-flex ships.

On the training front DAML is currently working with Lloyd’s Register for approval of its advanced LNG course in compliance with the SIGTTO LNG Officer Competency Standards. OSG requested DAML to adapt its “manned model” of an LNGC – named Dorchester Lady – at the Ilawa Training Centre in Poland to simulate the new class of Q-flex ships with twin-screw diesel propulsion systems.

It is anticipated that the management of the Q-flex vessels will be transferred from DAML to OSG in due course, once the LNG operations of OSG GAS are established. LNG