Nigeria LNG (NLNG) interests have contacted shipowners to determine their interest in taking on some of their existing tonnage and teaming up with them on new vessels.
Shipowners said the approach was made some time ago by state-controlled Nigerian National Petroleum Corp (NNPC), which is the lead shareholder in NLNG.
Owners said NNPC has been seeking interest from companies looking to team up with its liquefaction producer on the co-ownership of modern LNG carriers or newbuildings.
One said a figure of between six and eight new vessels had been mentioned.
Owners are wary
These ships would cover the newbuildings required for NLNG’s expansion with its sanctioned Train 7 project, which is due to come onstream in 2025, as well as LNG carriers required for fleet replacement.
At the same time, the state giant is understood to have been enquiring about farming out stakes in or ownership of NLNG’s older steam turbine LNG ships, some of which are due to complete long-term charters with the project within the next three years. These are thought to have included charters or leaseback deals.
Shipowners TradeWinds spoke to seemed particularly wary of any involvement in NLNG’s older vessels, which are smaller and less efficient than today’s delivering newbuildings.
Regional trading
One said that some of the NLNG’s sales deals with Asian buyers are coming to the end of their contract period and suggested that the older vessels might be deployed in more regional rather than long-haul trading.
There is also a lack of clarity as to how many new ships NLNG might require, particularly since it has not finalised all its sales deals from its upcoming 8 million tonne per annum liquefaction train and in the period of demand uncertainty caused by the Covid-19 pandemic.
TradeWinds reported in August that NLNG was looking at its fleet-renewal options.
A review process codenamed “Project Mahogany” was linked to the discussions, with broker and consultant Poten & Partners said to be taking a lead in the business.
NLNG’s major hurdle is its 17 steam turbine vessels aged between 14 and 18 years, which are held under its shipping arm, Bonny Gas Transport.
Wrestling
Eight of these are co-owned by shipowner BW LNG and Japanese trader Marubeni, with NYK Line controlling another two. They are due to end their 20-year charters by 2025 or earlier.
NLNG joins other charterer-producers and LNG buyers such as South Korea’s Korea Gas Corp, Abu Dhabi’s Adnoc Logistics & Services and Qatargas, which are wrestling with how to handle some of more than 200 steam turbine LNG carriers that are approaching the end of long-term charters.
NNPC controls a 49% stake in NLNG, Shell Gas 25.6%, Total Gaz Electricite Holdings France 15% and Eni International 10.4%.
