Joint venture Avenir LNG has not yet put any numbers on its planned LNG supply portfolio, but chief executive Peter Mackey hints that the company has serious ambitions in this area.
“We have an internal figure and it is not an insignificant sum,” Mackey said. “We see ourselves building up a pretty material LNG supply business.”
“I don't see supply being the hard part. The key for us is to focus on areas of stranded demand that have unmet needs in terms of LNG supply in the right parcel sizes, at the right price, enabled by the right assets.
Mackey said Avenir plans to play in multiple sectors across bunkering and supply to the power generation and industrial sectors.
Cross-sector play
He sees huge opportunities in each but added they each have different characteristics and counterparties.
He said buyers in the power and industrial segments want delivered gas and for a supplier to provide the LNG, shipping and import infrastructure to the point of use.
In these businesses, Mackey said Avenir is not typically looked at through a chartering lens, but rather one of an integrated supplier.
The LNG bunkering space is different again.
Here, Mackey said, some LNG fuel suppliers may be looking for tonnage under a traditional shipping model. But increasingly, where newbuildings are being ordered, counterparties are looking for LNG delivered to their vessels as they are not necessarily in that product market.
Energy majors such as Shell and Total, which are active in the major bunkering hubs of Rotterdam and Singapore, may be competitors in these areas.
But Mackey said: “There is a huge volume of marine traffic out there that exists outside those main hubs and that's a huge opportunity set for us.”
Spoiled for choice
Geographically, he sees the Caribbean, Central and Latin America as major areas of opportunity for Avenir.
The Mediterranean will also be of key importance for the company with its anchor terminal in Sardinia.
Mackey and his team are also eyeing potential projects in Asia and markets in South East Asia. Here, he said, the energy transition is prompting demand from smaller distributor power plants that either need small-scale supply solutions or are moving away from heavy fuel oil and diesel and towards natural gas.
“Opportunity is not the challenge for us at the moment,” he said. “There is a lot of potential out there.”
So, will the company need to expand its six-ship fleet? Shortly after founding Avenir, Golar LNG chairman Tor Olav Troim — a shareholder of Avenir — spoke about a possible 50-vessel fleet for the small-scale company.
“We are being very thoughtful about how we grow the company,” Mackey said. “Being asset enabled, we believe, is a huge differentiator for us.
“As the business grows, we will keep our asset position under constant review. We would want to find ourselves in a position where we are having to have difficult conversations about growing the fleet. That’s a nice problem to have.”
