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Shipping market focuses on mid-long term vessel tenders

24 Oct 2013 19:17:43 | glm

Three separate tenders for mid-long term employment of LNG carriers are to be awarded over the coming months with a number of offers already under assessment, shipping sources have told ICIS on 22 October.

Portfolio supplier Eni is currently reviewing offers for a single conventional vessel to start up on a three year sub-charter in January 2014 while Russian projects, Sakhalin Energy and Yamal LNG are both closing tenders for a total of 17 specialised vessels in the 
coming weeks.

Eni closes in on mid-term

Eni’s three-year LNG carrier tender that closed on 22 October has attracted up to 10 vessel offers, only one which will be selected and start up for from the end of January 2014.

The sub-charter, which will start from Belgium’s Zeebrugge terminal, is thought to be a result of Eni returning the 140,500 cubic metre (cbm) Galicia Spirit to term charterer Union Fenosa Gas by the end of this year, according to sources.

Eni tendered for a vessel between 135,000cbm and 165,000cbm with shipbrokers estimating approximately half of the offers have been made with dual-fuel diesel electric (DFDE) tonnage and half with steam-turbine (ST) tonnage.

Due to the comparative fuel efficiencies of DFDE and ST ships, charterers should be able to expect a $20,000-30,000/day discount when locking into a contract on a steam ship. While the ST vessels have been offered in at a discount – said to be in the $70,000s/day – brokers said that discount would not be sufficient given DFDE ships are being offered in the $80,000s/day range.

Eni is expected to short-list vessels early next week before awarding the tender. The tender also stipulates options to extend the three-year charter tenure by up to a year. Shipowners that are expected to have particpated in the tender include Oslo-based Awilco and Golar, which both have uncommitted newbuild vessels, while term charterers such as US-based Excelerate Energy and UK-headquartered major BP are also considered to have offered spare existing tonnage.

Since BP was awarded with the contract to supply significant volumes to the Bahia Blanca terminal in Argentina over 2014 and 2015, sources said there would be sufficient length in its fleet for it to shed a vessel (see separate story).

The mid-term Argentina supply contract is likely to be supplied from BP’s offtake position from nearby Trinidad. Up to now the portfolio-supplier has dedicated shipping resources to send part of its Trinidad offtake to South Korea.

Russia’s specialised fleet

Further out on the curve, shipowners are also thinking of offers into a Sakhalin Energy ship tender which will close by the end of 
this month.

The Sakhalin plant requires an additional winterised vessel with ice-class B specification from the third quarter of 2015. It is seeking charter tenures for three years plus extension options totalling to a period of up to 13 years.

Shipowners with speculative tonnage under construction are likely to offer into the Sakhalin tender but the need to have an ice-class B specification to access Sakhalin’s northeast Asian location on a year-round basis will constrain the number of bidders, shipping sources said.

“It is possible to add winterisation capabilities onto a vessel fairly easliy but in order to make it an “ice-class” the request will have to come at a fairly early stage in the construction process,” one shipowner said. Sakhlalin Energy has sub-chartered various vessels on a mid-term basis to supplement it dedicated fleet. Over the long term, however, the company expects to control a fleet of five 
LNG carriers.

Another Russian LNG project, Yamal LNG, which is being developed deep inside the Arctic Circle, is also close to matching its selected shipyard with prospective owners for up to 16 of its specially designed fleet.

Only four to five owners will be in a position to offer ownership of the Yamal Arc-7 fleet in a tender which closes next month, sources said.

“It’s quite a complex project. These ships are ice-class Arc-7 as well as ice breakers so you need special technology and management expertise,” a shipowner said.

The vessels will be built at South Korea’s Daewoo Shipbuilding & Marine Engineering yard and will come out in three waves from late 2016 in line with each train of the phased 16.5mtpa Yamal LNG development (see separate story).

The Yamal Arc-7 fleet will be unique among LNG carriers insofar as being the only ships capable of accessing the 16.5mtpa Yamal LNG plant on a year-round basis given their capacity to pass through ice up to 2.1 metres thick.

When the Arctic ice covering the Nortern Sea Route (NSR) melts sufficiently from July to late November, a handful of additional existing ships can cross the NSR over the north of Russia to east Asia. However, in the Russian vessel classification system, the current NSR-compatible ice-class 1A vessels are only equivalent to an Arc 4 standard

Shipowners, MOL, Teekay, Sovcomflot, and Dynagas are expected to be among the bidders in the Yamal tender.

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