Singapore’s Pavilion Energy has shortlisted shipowners for two bespoke LNG carriers it needs to grow its bunkering and breakbulk activities.
On the sidelines of the CWC World LNG Summit in Rome, Pavilion group chief executive Frederic Barnaud said the company is receiving final offers on the two ships and expects to make a decision in the first half of 2020.
Pavilion, which is controlled by Singapore's sovereign wealth fund Temasek, asked for offers on two sizes of vessels.
The company is looking at 20,000-cbm to 30,000-cbm LNG carriers for use in much smaller terminals with draught or access issues and is considering 80,000-cbm tonnage, sometimes termed Medmax-size, that can trade to a slightly wider area.
“These are the two sizes we are considering for essentially two different trading strategies,” Barnaud said.
“As a general principle, we are a little bit less willing to be on the ownership side,” he said.
But he added that in this case, where the company is developing new sizes of vessels to access new markets, this is something the board will discuss.
Barnaud, who was awarded CWC World LNG chief executive 2019 at the summit, explained that Pavilion is conducting separate negotiations on projects alongside those on the vessel acquisition process, adding that the two are unlikely to be fully aligned.
“We may have to take a decision on one or the other, project or vessel, before having full visibility on the rest,” he said.
Barnaud told the LNG meeting that Pavilion, which bought the LNG assets of Spanish energy company Iberdrola in June, will be expanding its activities outside its home market of Singapore by breakbulking cargoes and delivering them to neighbouring countries to facilitate market demand.
He is also bullish on moving into LNG bunkering.
Pavilion is also building a 12,000-cbm LNG bunker vessel at Sembcorp Marine in Singapore for 2021 delivery and will share the capacity and logistics of the ship with Total.
Barnaud said the company sees itself growing these activities through alliances, as shipowners want access to LNG bunkers on a wider scale.
“We are still developing with a set of possible alliances in China and North East Asia but we want to show leadership in Singapore first,” he said.
“Our new access in Europe, especially in Spain, will lead to some developments on that with the Iberdrola team and the momentum around it,” he said, citing that the company also has access to capacity at the UK's Isle of Grain terminal.
We may have to take a decision on one or the other, project or vessel before having full visibility on the rest
Frederic Barnaud
“We are going to continue and expand in LNG bunkering — not talk about it, but do it,” he said.
Barnaud highlighted Pavilion’s access to storage in Singapore where it has an import licence that gives it rights that might be suitable for bunkering operations.
The company also has access to a storage tank at Singapore LNG where a consultation on expansion is underway, which Barnaud said is likely best suited for reloading and re-exporting outside of Singapore waters.
“It is a complex set of decisions between the storage rights in Singapore, between the shipping strategy and the market development," he said.
