Small-scale specialist Avenir LNG is moving into China with the sale of one of its fleet of six small-scale vessels to a Chinese joint venture — as Shanghai makes its move to become the country's first LNG bunkering hub.
Avenir said on Monday that it had sold its 20,000-cbm newbuilding Avenir Allegiance to Shanghai SIPG Energy Service Co (SSES), a joint venture between Shanghai International Port Group (SIPG) and Shenergy Group.
It said SSES has inked a long-term deal to supply LNG bunkers to CMA CGM’s container ships in Shanghai on behalf of SIPG.
Avenir has also signed a long-term joint cooperation agreement with SSES, under which it will take on the global marketing of LNG bunkering services in Shanghai Port and support the Chinese JV SSES with operational and technical services.
The announcement confirms a TradeWinds article from 13 January on the ship sale.
Significant proceeds
No price details were released on the sale of the vessel — which will become the largest LNG bunker vessel (LNGBV) to be put into operation — but Avenir said it “released significant cash back to the company”.
“The proceeds will be used to enhance Avenir’s working capital position and fund future growth opportunities,” it said.
The Avenir Allegiance, which was delivered in December, was contracted at CIMC Sinopacific Offshore & Engineering in 2018 at a price slightly over $55m.
The vessel is being renamed Hai Gang Wei Lai meaning “Future Seaport”, echoing the Avenir name which is French for “future”.
A first bunkering operation is scheduled for the end of the first quarter.
Shanghai first
Speaking to this publication Avenir chief executive Peter Mackey said there is huge growth potential for LNG bunkering in China and said he believes this move will help Shanghai jump to the forefront of that with this large LNGBV.
This vessel will be the first of its kind to offer LNG bunker supply to large oceangoing ships in China on a ship-to-ship basis.
Mackey said the strong price achieved on the ship, which he admits is at “a significant premium to its newbuilding cost, reflects both the interest in small-scale LNG vessels and the sector along with Avenir’s move to order its tonnage four years ago.
“We saw the demand coming and we invested ahead and that is showing up in the price we achieved for the ship,” he said.
Focus
Mackey said the company is pleased to have locked in a very healthy return on the vessel, which recycles cash back into the business. But he added: “The focus is not about selling the ship it is about setting up this business in Shanghai.”
Luo Wenbin, SIPG engineering and equipment department general manager, said: “SIPG is making efforts to build the LNG bunkering hub for international vessels in Shanghai Port.”
He said SSES and Avenir’s tie-up will promote the LNG bunkering services for CMA CGM and other international liner customers in Shanghai port and make a positive contribution to the energy transition and carbon reduction of the shipping and logistics supply chain.
Mackey said: “This deal marks another major achievement in Avenir’s development as we continue to expand our LNG bunkering network globally.”
Ship | Size (cbm) | Delivery | Yard | Charterer |
Avenir Advantage | 7,500 | 2020 | Keppel Nantong | Petronas* |
Avenir Accolade | 7,500 | 2021 | Keppel Nantong | New Fortress Energy |
Avenir Aspiration | 7,500 | 2021 | CIMC Sinopacific | Avenir LNG |
Avenir Allegiance | 20,000 | 2021 | CIMC Sinopacific | Shanghai SIPG Energy Service Co (SSES) |
Avenir Ascension | 7,500 | 2022 | CIMC Sinopacific | Avenir LNG |
Avenir Achievement | 20,000 | 2022 | CIMC Sinopacific | New Fortress/Shell |
*Ship is time-chartered from Future Horizons, a 50:50 MISC-Avenir LNG joint venture