Malaysian LNG shipper MISC, a unit of energy giant Petronas, said it has delivered 372 cargoes of the chilled fuel last year in a weak shipping market with low spot freight rates and an oversupply of LNG vessels.
In 2015, MISC shipped 20.74 million tonnes of LNG for its customers, carving 8.3% of the total world LNG trade, the shipping giant said in its Sustainability Report.
MISC delivered a total of 408 cargoes amounting to 21.8 million tonnes of LNG in 2014.
The average spot freight rate for LNG vessels in 2015 has almost halved compared to the previous year, MISC said.
Several factors contributed to the weakening of spot market rates. “These included the introduction of new vessels into the market without an equal increase in LNG trade, and delays in the completion of new LNG projects in Australia which reduced spot charter opportunities for ramp-up cargoes,” MISC’s CEO, Yee Yang Chien said in the report.
“Outages in several liquefaction plants, namely in Yemen, Angola and Egypt, which reduced the LNG supply and eventually shipping demand, also led to weaker spot market rates,” the CEO added.
In early 2015, MISC secured a contract novation from Petronas for five new LNG carriers together with long-term charter contracts. Orders for the Moss type carriers have been placed with Hyundai Heavy Industries (HHI) with the first newbuild LNG carrier scheduled for delivery by the end of 2016.
The shippinng company also secured extensions for its Puteri Class vessels for long-term contracts. The Puteri Intan and Puteri Delima were delivered to Petronas LNG in October 2015 signifying
the completion of the repair and life extension (RLE) programmes for both vessels and the beginning of their contract extensions, MISC said.
By the year’s end, the Puteri Nilam was delivered to Petronas LNG upon completion of its RLE programme with its contract extension kicking in.
The year also saw MISC expanding its presence in Australia when the company’s Seri Bakti vessel became the first MISC vessel to berth at the Santos GLNG terminal in the month of September.
The first shipment from GLNG, Curtis Island was delivered to Pyeong Taek terminal in South Korea on 27 October 2015.
LNG shipping market to stay weak
“With no sign of an uptrend in the oil price, the market for LNG is expected to remain below the desired level,” Yee Yang Chien said.
This will “prolong the low vessel utilisation environment and low in-charter hire rates” in the LNG shipping market.
Globally, 44 newbuilds are expected to be delivered in 2016 whereby 20% out of the total number will be delivered without any employment, according to the CEO.
“Most of these vessels are expected to be deployed to Australian and US-based liquefaction projects. In view of this, spot charter rates for LNG shipping are expected to remain low,” he added.
LNG World News Staff