Skaugen newbuilding to expand LNG bunker infrastructure

Norwegian shipowner I.M. Skaugen Group (IMSK) named the first ship in its new series of Multigas carriers in a ceremony at the Skaugen joint venture company with Shenghui Gas & Chemical Systems’ shipbuilding facility in Zhangjiagang, north of Shanghai, China.

The 10,000 cbm sized vessel, named “Norgas Innovation”, will initially enter the fleet of Norgas Carriers, the I.M. Skaugen company involved in the maritime transportation of petrochemical gases and LPG. However, this first Multigas vessel will, in the second half of 2010, be dedicated to Nordic LNG and their Mini LNG business in Scandinavia.

Nordic LNG, a joint venture between Lyse and I.M. Skaugen, will supply natural gas to ‘stranded’ customers who do not have access to pipeline networks. The Multigas vessel will be used to transport the LNG directly industrial to end-users as well as to Nordic LNG’s own hub terminals for onward distribution. End user markets include also the maritime fuel market, where LNG will replace bunker oils.

The long term future of heavy fuel oil as bunkers is questionable, both in terms of dependency on oil and not at least with regards to emissions. Natural gas in contrast gives a far more environmentally friendly combustion and in addition there appear to be greater reserves available than oil. Thus natural gas in liquid form (LNG) as marine bunkers has the potential to be the solution for the shipping industry to cope with its emission challenges in the years to come. By running their vessels on LNG ship owners will be able to solve their emission problems at the source and avoid the need for auxiliary equipment such as scrubbers and selective catalytic reduction (SCR) units.

To make LNG a real alternative to traditional fuel oil and diesel oil bunkers, a suitable infrastructure has to be developed. This means that LNG has to be shipped from either LNG liquefaction plants or traditional LNG import terminals to smaller regional hubs. There, LNG-fueled ships can bunker either directly or from smaller LNG bunker vessels serving the hub.

The vessel is scheduled to be delivered to its owners, a Singapore based company called Singco Gas Pte Ltd, a 50/50 joint venture between GATX Corporation and by I.M. Skaugen Marine Services Pte Ltd, a 100% owned subsidiary of Norway-based I.M. Skaugen SE by end of this year/early January 2010. Flying Singaporean flag, the vessel will be operated by Norgas Carriers AS.

The company has so far in total six (4 x 10,000 cbm + 2 x 12,000 cbm) such ships under construction through Skaugen Marine Construction, the division within I.M. Skaugen that manages its newbuilding activities in China. The delivery of these six vessels will be completed over the next two years, but the longer-term plan is to build at least 10 of these Multigas carriers.