Shell has started to move on its next haul of LNG carrier newbuildings as it seeks tonnage for its own projects, portfolio volumes and fleet-replacement needs.
Industry sources said the energy major is likely to be seeking around eight to 10 LNG carriers for delivery in the next two to three years.
One indicated that Shell is likely to home in on a preferred shipyard before the end of this month as the Anglo-Dutch company, which is known for wanting to stamp its own technical specifications on vessels, tries to secure the best price on the vessels.
But he added that this could prove to be something of a pricing exercise in that if Shell felt the offers were not competitive, the company could opt to take speculatively-ordered tonnage instead.
The oil and gas giant has consistently declined to comment on its commercial LNG shipping activities.
Shell had been expected to approach shipbuilders and owners for LNG tonnage but the timing on its move had been uncertain.
The company is likely to be hungry for LNG tonnage as it develops the first 14-million-tonnes-per-annum phase of its 28-mtpa LNG Canada project, which is due to come online in 2023.
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The major has also been seen increasing its LNG portfolio, buying two mtpa from Venture Global’s Calcasieu Pass LNG project in the US.
The company also needs vessels to replace some of its older LNG ships, which it has been offering in for conversion projects.
Shell made an earlier swoop on the market for LNG newbuildings in the middle of last year, sending out a request for offers on an initial two vessels to shipowners under strict confidentiality terms.
Weeks to reply
On this approach, the company gave owners just weeks to reply and by December had fixed six vessels from two shipowners on long-term time charters of up to seven years.
Christos Economou-led TMS Cardiff Gas inked contracts with Shell for four of its newbuildings, with Sovcomflot (SCF Group) signing up for a further two.
All six newbuildings are being built at Hyundai Heavy Industries in South Korea with XDF low-pressure gas-injection propulsion systems.
Brokers said Shell is likely to be keen to secure the best berths and/or existing newbuildings before other large charterers move in for their own requirements.
ExxonMobil has already fixed two LNG carriers controlled by MISC but is expected to need more vessels.
French major Total, which has been expanding its position in the LNG market, is also due to make a second pass on ships, after locking in some vessels on similar deals to Shell.
On top of this, Qatar continues to march forward with plans to build up to 80 LNG carriers, which could start to mop up yard space from next year.
