Malaysia’s Petronas has approached shipbuilders for a series of up to six LNG carrier newbuildings to lift cargoes from the $40bn LNG Canada project in British Columbia.
Industry sources said Petronas has asked yards for offers on three vessels, with options on a further trio.
The company is looking for delivery dates on the ships in 2024.
Yards will need to dovetail this business with the 150-plus LNG carrier berth slots Qatar Petroleum has reserved for delivery from the end of 2023 to 2026.
Those following the business said the ships are required for Petronas’ liftings from the LNG Canada project.
Petronas, which has been pushing to grow its global LNG trading reach, is the second-largest shareholder with a 25% stake in the 14 million tonne per annum, liquefaction development under construction in Kitimat, British Columbia.
Trader Vitol has signed up with Petronas to buy 800,000 tonnes per annum on a delivered ex-ship and free on board basis from 2024, with the primary volumes for this supply coming from LNG Canada.
Going it alone
It would appear Petronas is opting to go it alone on its shipping needs for the project and is collecting the initial offers from yards rather than its shipping subsidiary MISC.
A year ago, MISC teamed up with Japan’s NYK Line and Mitsubishi Corp to co-own two LNG carrier newbuildings for the Shell-led LNG Canada project.
The trio contracted two 174,000-cbm, X-DF LNG carriers with partial re-liquefaction systems at Hyundai Samho Heavy Industries for delivery next year.
The two vessels are fixed on 18-year charters to Mitsubishi subsidiary Diamond Gas International, which manages the sales and marketing of the trader’s LNG equity offtake from the US and Canada, and other countries around the world.
Canada has been battling for years to get an LNG project off the ground that would see its gas shipped transpacific to Asian buyers.
LNG Canada lead developer Shell, which has a 40% stake, and fellow shareholders took a final investment decision on the project in October 2018. PetroChina and Mitsubishi Corp each own 15% of the project and Korea Gas Co holds a 5% stake.
Hailed by Trudeau
At the time, Canada's Prime Minister Justin Trudeau hailed the sanction as the “single largest private sector investment project in Canadian history”.
LNG Canada consists of two 7-mtpa trains with cargoes from these targeted at markets in Asia. There is potential to expand the development with an additional pair of trains.
Construction slowed on the project in the first quarter as the pandemic spread and workers were pulled off site. But work has been ramping up again.
The project has also faced protests over its Coastal GasLink pipeline, which is being built to carry gas from British Columbia’s Peace region into the Kitimat LNG plant.
