Anthony Veder Group is betting on the future growth of small-scale LNG where it has established itself as a key player
When it comes to transporting liquefied gases and petrochemicals, there are few shipowners that can claim their ships carry ammonia, ethylene, propylene, butadiene, LPG, LNG, and even food-grade CO2 for carbonated soft drinks. One of a handful of owners able to transport such variety is Netherlands-based Anthony Veder Group, which owns, operates and manages a versatile fleet of small- and mid-size gas carriers around the world on contracts of affreightment, time charters and in spot markets.
“We have been in the gas business for 50 years, so we know a thing or two about what’s happening in the market,” Anthony Veder chief executive Jan Valkier says. “If the opportunity is there, we are able to grasp it quickly. It’s a strategy of knowing our customers and building ships for their needs.”
In many respects, it was Mr Valkier’s father who first steered Anthony Veder into the gas tanker business. Back in the late 1960s, Mr Valkier Sr was a director of a fertiliser manufacturer that required large amounts of ammonia to be transported by gas tanker. At that time, the Anthony Veder Group was still owned by the Veder family. Mr Valkier Sr contacted a board member at the Anthony Veder Group, which resulted in the Dutch shipowner’s decision to build a gas tanker, Coral Maeandra, in exchange for a long-term contract for ammonia transportation. As a result, it established Anthony Veder Group’s gas tanker operations in 1969 and cemented a long business relationship between the Valkier and Veder families.
When the Veder family decided to sell its business interests in 1991, the Valkier family and HAL Investments acquired the Anthony Veder Group. After the change of ownership, Anthony Veder Group shed a diverse portfolio of non-core holdings to focus on liquefied gas transportation.
While petrochemicals transportation comprises the lion’s share of Anthony Veder’s business by volume, about 10 years ago the company envisioned small-scale LNG as an emerging business segment, expanding its fleet in 2009 with the 7,500-m3 LNG carrier Coral Methane.
“While it’s a relatively small market, small-scale LNG has a great deal more potential in the future,” says Mr Valkier. “It’s being driven by LNG as a fuel and power generation. It has been slow growth, but I think it will gain momentum in the years ahead.”
Anthony Veder’s small-scale LNG operations are in the Baltic region, including Northern Europe and Scandinavian countries, and in the Caribbean.
“If the opportunity is there, we are able to grasp it quickly”
In the Caribbean, Anthony Veder supplies LNG from various sources, including the US, to Jamaica, which is transitioning its power plants to burn natural gas. “We see that the Caribbean has potential, but the reality is that it is developing very slowly,” says Mr Valkier.
However, Mr Valkier believes the IMO 2020 sulphur cap could be a pivotal moment for LNG as a fuel. He thinks the sulphur cap will lead to higher bunker prices because oil refineries will have to retool their production to meet demand for compliant fuel: “You can make a strong environmental and business case for LNG. It emits less CO2, 90% fewer NOx, no SOx and no particulates. It’s a much cleaner fuel than any gasoil or heavy fuel. We think LNG in the long run could be an economical alternative to 0.5% sulphur fuel.”
Concludes, Mr Valkier, “LNG as a bunker fuel and for power generation makes sense. If you talk about sustainable electricity, next to solar and wind, gas-fired power stations represent the best opportunity.”
As the IMO 2020 sulphur cap draws closer, Mr Valkier also notes that larger marine consumers. such as container shipping lines and cruise companies. are committing to LNG as a marine fuel. He thinks consumers will also play a role in the shift to LNG: “I think most people that live in Europe or the US that buy products from China want to see those goods transported in an environmentally sound way. I think that’s what is going to drive the market.”
In January, a newly refit Coral Methane carried out its first LNG bunkering operation on the LNG-powered cruise ship AidaNova at Santa Cruz de Tenerife in the Canary Islands. Coral Methane was modified from an ethylene/LNG carrier to an LNG bunker vessel for Shell, which is supplying the LNG. Coral Methane was refit with a hose transfer system for bunkering operations and a boil-off gas (BOG) management system for efficient use of natural gas and carbon emission reductions.
While part of fleet operates on low sulphur gasoil, Mr Valkier vows that all future fleet additions will operate on LNG as a fuel.
When it comes to addressing CO2 and climate change concerns, he believes that LNG will be the energy of choice for the next 20 to 30 years, “until there is a better alternative”.
Discussions regarding carbon capture storage (CCS) are also beginning to heat up. “CCS is part of the solution to solve CO2 emissions,” he says. While nothing as yet has materialised, says Mr Valkier, ships can play an important role in the process: “In the North Sea, there are quite a few empty gas fields, which could be used for CCS. Ships could transport the CO2 to the gas fields for injection.”
Expanding the fleet
Anthony Veder has a long history in building and delivering ships in China, such as the LNG-fuelled LEG vessels Coral Star and Coral Sticho. Both ships were built in 2014, each with a capacity of 4,768 m3; they are two of eight vessels in the Rotterdam-based shipping company’s fleet that burn LNG as a fuel.
Earlier this year, the Dutch gas tanker owner acquired a 30,000-m3 LNG carrier under construction in China at Zhejiang Xinle Shipbuilding in Ningbo. It is expected to be available for worldwide trading in the H2 2019.
Continuing its growth in the small-scale LNG sector, Anthony Veder also acquired two 10,000 m3 combined gas carriers –formerly owned by bankrupt IM Skaugen – from a Nordea Bank-led consortium. The two ships, Norgas Creation and Norgas Invention, can transport both LNG and petrochemical gases, including ethylene (LEG).
Both combined gas carriers were built by China’s Taizhou Wuzhou Shipbuilding, with Norgas Creation delivered in 2010, followed by Norgas Invention in 2011.
With the acquisitions, Anthony Veder expands its fleet to 33 vessels, including eight small-scale LNG vessels, to support the growing demand for LNG as a marine fuel and its distribution for use in the power generation market.
The two gas carriers acquired from Nordea Bank were part of the fleet of Norgas Carriers, an IM Skaugen company, and are renamed Coral Favia and Coral Fungia.
Prior to the addition of the new vessels, Anthony Veder had 30 gas carriers in its fleet, the smallest of which is the 3,800 m3 semi-pressurised, fully refrigerated LPG carrier Coral Obelia, and the largest is the fully refrigerated 35,130-m3 Prins Alexander, currently chartered to Swiss-based LPG trader Geogas Trading SA.
First LNG carrier with 'ice-class 1A Super'
Last year, Anthony Veder took delivery of Coral EnergICE, the first LNG carrier holding the ice-class 1A Super, from Germany’s Neptun Werft. Managed by Gasum, Coral EnergICE is specially designed and constructed to operate in the Baltic Sea, carrying LNG to Gasum LNG terminal in Pori and the Manga LNG terminal in Tornio, Finland.
The vessel’s hull is reinforced to break one-metre-thick ice and it uses BOG as a fuel for its main and auxiliary engines, making the vessel fully compliant with future emission regulations.
“The sulphur cap will lead to higher bunker prices because oil refineries will have to retool their production to meet demand for compliant fuel”
Special innovations on deck are geared for improving crew safety; one such example is the cap on deck, which protects the equipment and prevents icing outside. The tanker also has additional shelters on deck, with warmer platforms for the crew’s feet. Heat tracing on the doors ensures they will always open, no matter how harsh the conditions might be.
Mr Valkier says: “Coral EnergICE is the third LNG carrier we have delivered to our long-term customer Gasum in the past five years. The high-tech vessel is capable of serving the northern Finnish harbour of Tornio all year around, even when temperatures reach -25ºC.”
Coral EnergICE’s construction was funded with the first sustainable shipping loan, fully certified in accordance with the Clean Shipping Index Guidelines by Bureau Veritas, which also verified the sustainable credentials of the transaction.
ABN AMRO arranged a €66M (US$74M) private placement for Anthony Veder with investor Delta Lloyd Asset Management in Q1 2015 to finance the construction of the vessel.
Digitalisation is also playing a role in the transformation of the company’s fuel trading procedures. Late last year, Anthony Veder struck a deal with Rotterdam-based Bunker Connect covering bunker procurement and management for the Amsterdam-Rotterdam-Antwerp (ARA) set of ports.
The Bunker Connect online platform enables real-time fuel trading and fuel quality monitoring by analysis of results and historical data.