Flex LNG counts on technology for the future
For its growing LNG carrier fleet, Flex LNG is heavily investing in the adoption of new technologies. DNV GL has partnered with Flex LNG to facilitate safe implementation and operation.


14 September, 2018
“Technology is the key differentiator for Flex LNG,” confirms CEO Øystein M. Kalleklev. “We started from scratch, with no legacy issues to consider. This allowed us to invest fully in the technology that can set us apart from the competition.”

Kalleklev is referring to the major advances in LNG carriers that give newer vessels efficiency and environmental advantages over older tonnage. Long out of service in other trades, steam turbines have remained in favour as power plants for LNG carriers due to the ample supply of boil-off fuel from their cargo. But as insulation technologies improve, boil-off has been reduced and more efficient engines are needed to cover the same distances using less fuel.

“When boil-off was as high as 0.2 per cent, you did not really need a highly efficient propulsion system. The move from steam turbines to four-stroke diesel electric came in around 2006, and that was a great improvement. But now boil-off is down to around 0.07 per cent, and even less with reliquifaction plants, so we are employing the most efficient, modern slow-speed two-stroke engines.”

Moving up at a rapid pace

This adoption of new technology reverses a long-standing trend in shipping, where LNG carriers have risen to the top of the shipping industry in efficiency advances. “Not only do the new engines burn less fuel, they are smaller than the old technology, which means there is more room for cargo,” Kalleklev explains. All this adds up to newer ships being more attractive on the charter market, a large part of the reason Kalleklev says Flex LNG is bullish on the segment.

Flex LNG has taken delivery of four new vessels as of autumn 2018, with two additional MEGI vessels set for delivery from DMSE in mid-2019, and two X-DF vessels due from HSHI in 2020. In addition, the main shareholder in Flex LNG, the John Fredriksen family, ordered five more LNG carriers through their private company Seatankers in 2018, scheduled for delivery in 2020/21. This brings the Group’s tally of modern LNG vessels to 13, if the eight Flex LNG vessels are included.

All the ships are equipped with slow-speed two-stroke propulsion (MEGI or X-DF), giving about 30 per cent lower fuel consumption than tri- or dual-fuel diesel electric vessels. The X-DF newbuildings will be fitted with Selective Catalytic Reduction (SCR) to comply with IMO Tier III regulations both in gas and liquid mode, giving them high trading flexibility.

The X-DF vessels will be classed with DNV GL. “Flex LNG and our affiliated companies Frontline, Golden Ocean, Ship Finance and Seatankers use many different class societies in order to learn best practices and benchmark performance. As we have good experience partnering with DNV GL, we are pleased to have them on board for the four X-DF carriers under construction.”

Johan Petter Tutturen, Business Segment Director Gas Carrier at DNV GL, comments: “For DNV GL, energy optimization and efficiency have always been among our main focus areas. Charterers are looking for the most energy efficient LNGC, since they are the ones who will pay for the fuel. By investing in new and innovative technology to reduce fuel consumption and make assets even more environmentally friendly, owners give themselves an advantage in the market. With our vast experience in this field, DNV GL is able to support and assist the owner and builder in achieving this goal.”

Good and getting better

“The four vessels we have in operation now have performed well,” Kalleklev reports. “We are now in the early phase of the recovery cycle for LNG shipping following four challenging years from 2014 to 2017. After the Fukushima reactor incident, the market for LNG transport experienced a boom, which resulted in excess transport capacity. A lot of ship owners had good access to capital and they placed too many orders.”

He goes on to explain that the down cycle in shipping rates was also due to delays in bringing new LNG capacity on-stream, in particular the Australian trains. Despite these factors, Kalleklev believes that the fundamental prospects for LNG shipping remain very strong, meaning that markets have balanced out relatively quickly despite limited attrition of older tonnage.

“Even though older steam vessels have high retirement age, many in layup will not come back,” Kalleklev says. “The last gener- ation of vessels will be around for a while for short-term contracts and short voyages. But for longer hauls you need more efficient vessels.”

Then there is the benefit of LNG becoming a global commodity. “LNG is not a liner business anymore. Owners can sell where demand is highest, and that increases the need for transport.” LNG traders have also established themselves in the industry, giving new life to the LNG market. “This is the future trend. We have about 300 million tonnes of LNG a year being produced globally right now. In just a couple of years, that will increase by 100 million tonnes.”

Demand is growing to match supply as well, largely due to the lower emissions footprint of LNG and its lower price compared to other energy sources. “The trend favours a switch from coal and oil to gas, and LNG is the best way to transport gas over greater distances,” says Kalleklev.

Øystein M. Kalleklev, Chief Executive Officer, FLEX LNG Management AS
“There is always risk involved in choosing new technology. Rather than avoid it, we like to talk about technology risk as a differentiator.” - Øystein M. Kalleklev, Chief Executive Officer, FLEX LNG Management AS
Future fuel

“In the marine market, everybody is talking about scrubbers for compliance with upcoming emissions regulations, but I think that LNG as a maritime fuel will become more attractive after 2020.” He points to the general uncertainty surrounding regulations, emissions and availability of both heavy fuel oil and marine gas oil – not to mention price.

“LNG is cheaper than gas oil, and large, high-speed vessels like container ships are coming on with LNG capabilities. They consume more fuel, and they will need to comply with ECA sulfur restrictions, so it also needs to be clean. This is part of the reason we believe there will be a need for more LNG at bunkering stations.”

With all these signs pointing to a stronger market Øystein M. Kalleklev has good reason to be optimistic about LNG, both as a commodity and as a fuel. Combined with their investment in cleaner, more efficient technology, Flex LNG would also seem well positioned to serve the growing market. “There is always risk involved in choosing new technology,” he sums up. “Rather than avoid it, we like to talk about technology risk as a differentiator

Takk Triton

Her sitter vi I FLNG til Dovre faller

Triton
Kan du gjengi noen interessante poenger fra FA i dag om FLNG for oss som ikke har sett FA ?

delta
Kina økte importen av LNG med 50% i årets første halvår, grunnet krav om å redusere kullforbruket for å bedre luftkvaliteten. Også India, Sør Korea og Europa økte importen. Både tilbud og etterspørsel er i kraftig vekst. I følge flere prognoser vil det bli tilbudsunderskudd i 2025, dersom det ikke bygges flere LNG fabrikker. Tilbudet vil øke med nesten 100 millioner tonn de neste årene. Dette vil kreve 130 nye skip, det er lagt inn ordre på 90 skip. Dette står i dagens Finansavis.

Takk, vicktor!

LNG shipping rates spike with no respite seen through 2019

* September rates reach $95,000 a day from $75,000 in August

* In 2017, LNG shipping rates were usually $30,000 to $40,000

* Rising U.S. LNG deliveries tie up ships for longer

* Shippers charter ships for longer, leaving less for others

By Sabina Zawadzki and Jessica Jaganathan

LONDON/SINGAPORE, Sept 21 (Reuters) - The price of shipping liquefied natural gas (LNG) has spiked in September and is likely to remain high next year, buoyed by rising production from new plants and concerns that demand for LNG vessels will outpace supply.

The rate for vessels shipping LNG from the Atlantic Basin to Asia has jumped to $90,000 to $95,000 a day this week from $75,000 a day at the end of August, brokers and traders said.

Rates, which broadly hovered around $30,000 to $40,000 a day from 2015 to 2017, have risen due to longer distances covered to transport LNG from new terminals in the United States and Arctic Russia, surging demand in China and a limited number of ships.

Rates have hit "the highest levels since the last bull market of 2012 ... elevating the starting point for another anticipated winter market rally and the next cyclical upturn," said Jonathan Chappell, analyst with Evercore ISI.

Shipping firms see little sign of them slipping soon, predicting high rates for 2019 or longer, during their earnings calls this month.

Hoegh LNG Chief Executive Sveinung Stohle told investors and analysts he expected rates to "increase on the levels where they are, certainly, for the next two to three years".

Strong LNG demand has helped drive the shipping rate rise. Japanese and South Korean utilities having been stocking up on LNG for winter, driving prices to a seasonal four-year high. Demand was stronger than usual after a summer heatwave meant reserves were drawn down to power extra air-conditioning.

Despite this week's pause, Asian buyers are expected to return as the northern hemisphere winter sets in.

This increasing demand for LNG has compounded already rising shipping rates, partly driven by the ramping up of exports at Novatek's Yamal LNG terminal and at U.S. LNG terminals.

Deliveries of LNG from the Northern Russian Yamal facilities have created extra demand on ships because Arctic-class vessels lifting cargoes transfer the LNG to conventional carriers in Europe for onward journeys.

Deliveries from U.S. terminals to Asia pass through the Panama Canal, taking longer than cargoes from second largest producer in the world, Australia.

Wood Mackenzie estimates it takes 1.9 ships to carry 1 million tonnes per annum (mtpa) of LNG from the U.S. Gulf to Japan compared to 0.7 ships from Australia.

These factors have prompted many shippers to book ships on multi-month or multi-year charters, locking in rates before they rise but cutting the availability of vessels for others.

"If you're at $85,000 now (for shipping day rates), you could easily see $115,000 to $120,000 in the winter," said Jefferies energy shipping analyst Randy Giveans.



SHIP DEFICIT

Underpinning the rates is a worry there may not be enough ships in coming years to match rising output, including from U.S. terminals, which are expected to add 84 mtpa by 2023, turning the country into the world's second largest exporter.

Iain Ross, the chief executive of LNG shipping company Golar LNG, said this month the forecast of a 23 percent rise in LNG production over two years would require 100 extra vessels. But only 66 were scheduled to be delivered in time, he said.

"It's no longer possible to go out today and order a vessel for delivery before 2021," he said. "It seems to us (there is) a structural change in the sector that will (be) driving demand."

But Wood Mackenzie said shipping firms should be wary of ordering too many more vessels now because of the potential for a glut of LNG at some point between 2020 and 2025, as new projects coming onstream may find there are not enough buyers.

"If (ship) ordering activity continues at recent levels there is a high danger that it will be too much too soon," said Andrew Buckland, Wood Mackenzie's LNG and shipping analyst. (Reporting by Sabina Zawadzki Editing by Edmund Blair)

kilde:
https://finance.yahoo.com/news/lng-shipping-rates-spike-no-141853067.html

delta
Må nesten si Takk jeg også, selv om mine engelsk kunnskaper kunne vært bedre, så ser dette veldig lovende ut.
Her skal du få litt mer fra den samme artikkelen.
Det står at spotratene de seneste ukene har kommet seg opp i 110.000 dollar pr. dag.
Det er bare kjøpsanbefalinger på aksjen og gjennomsnittlig kursmål er kr 18,10.
Det er først i 2020, når dagens nybygg program er levert, at de store tallene vil begynne å vise seg.
Det synes jeg ikke er veldig lenge til, så nå vurderer jeg å kjøpe flere aksjer.

China on track to become largest LNG importer by next year, vessel rates go through the roof
September 24, 2018 Mikal Boe
China's General Administration of Customs released import statistics showing utilities imported 4.71 million tonnes of liquefied natural gas (LNG) in August, to reach 32.63 million tonnes in the first eight months of 2018.
Source: Golar LNG
SOURCE: GOLAR LNG

This puts China on track to overtake Japan as the largest importer of LNG in the world as early as 2019.

The August import numbers were 51.5 percent above the same period in 2017, according to the Customs Authority. Imports of natural gas have grown to meet increasing demand driven by environmental policies to replace coal-fired electricity generation.

The rapid growth in LNG imports is also driving the cost of transportation higher, with Atlantic cargoes bound for Asia approaching $100,000 per day for Large LNG carriers, up from $30,000 per day a year ago.

In addition to China's appetite for LNG, utilities in Japan and South Korea have also been storing up LNG for the winter season.

'If you’re at $85,000 now, you could easily see $115,000 to $120,000 in the winter’, US investment bank Jefferies’ energy shipping analyst Randy Giveans told Reuters.

More tonne miles from longer distances covered to transport LNG from new terminals in the United States and Arctic Russia, as well as a limited number of ships, is adding further momentum to the bullishness in the LNG shipping market. Combined, these factors have led to a strong period charter market for LNG carriers, spurring owners to add a record number of new build ships to the shipyard order book.

The global LNG fleet is set to expand by a record volume in 2018, as 64 new vessels hit the water totaling over 360 million cubic feet of cargo carrying capacity. The growth in the fleet however, is not enough to keep up with the short-term, but long-distance demand of Asian buyers.

Over 70% of global LNG cargoes are destined for the Asia-Pacific region, with Japan, China, and South Korea being the top three importers in the world. These factors are set to keep LNG freight rates elevated well into 2019 and beyond.

Scottish Energy Research and Consultancy firm Wood Mackenzie however, warns in a recent report that shipping firms should be wary of ordering too many more vessels now because of the potential for a glut of LNG at some point between 2020 and 2025, adding that new projects coming onstream may find there are not enough buyers

- Det sterke antiforurensningsstandpunktet fra kinesiske myndigheter presser stålmøllene og utilities-selskapene til å bruke mer importert jernmalm og kull. Vi venter at den høye kullimporten vil svinge, men at jernmalmimporten vil øke stødig. Tørrbulkordreboken er begrenset, og kapasiteten vill falle videre når IMO2020 gir incentiver til sakte seiling, skriver meglerhuset.

Analytikerne har ifølge nyhetsbyrået økt sine estimater for utnyttelsesgrad og frakt.

Golden Ocean stiger 3,6 prosent til 80,65 kroner på Oslo Børs fredag formiddag. SEB ser dermed en oppside på 52-53 prosent i aksjen.

Høyner i Flex LNG

Samtidig har Danske Bank ifølge TDN Direkt tatt opp dekningen av et annet John Fredriksen-dominert selskap: Flex LNG.

Konklusjonen er kjøp, med kursmål 17,50 kroner.

Flex LNG stiger 0,2 prosent til 14,85 kroner på Oslo Børs fredag formiddag. Meglerhuset ser dermed en oppside i aksjen på 17-18 prosent.