Mitsui OSK Lines eyes LNG expansion

Japanese shipowner Mitsui OSK Lines (Mol) plans to expand its LNG business, betting on an improvement in the LNG market in 2021, the firm said today.

It expects international LNG flows — and tonnage demand — to increase in 2021, following a slight fall this year.

Mol will expand its LNG transportation business, as well as its floating storage and regasification unit (FSRU), LNG-to-power and LNG bunkering operations.

But this will be coupled with a reduction by around 40 vessels from other operations, notably oil tankers, bulk and car carriers. The firm has already confirmed 13 vessels that will be removed from its fleet.

The owner also aims to develop other energy businesses, such as wind power and transportation of fuel for biomass-based generation.

Mol has five LNG carriers remaining on its orderbook, two of which — the 174,000m³ LNG Phecda and LNG Megrez — are designated for use at Russia's 16.5mn t/yr Yamal project once they are delivered later this year. The remaining three — Hulls 2498, 2499 and 2505 — are scheduled for delivery from South Korea's Daewoo Shipbuilding and Marine Engineering in 2021.

Mol said in February that it is setting up a division to focus on offshore LNG projects. This was followed by a FSRU charter agreement for Germany's planned 7.8mn t/yr Wilhemshaven terminal, signed in May. Mol is also to provide an LNG-to-power unit for Mozambique's Nacala port under a joint venture with Turkey's Karmol.

Mol also owns the 263,000m³ FSRU Challenger, which was recently reinstalled at Turkey's Dortyol terminal. The vessel is scheduled to move to Hong Kong from 2021.

The owner's expansion into offshore LNG import facilities could be informed by its expectation that global liquefaction capacity will outstrip LNG demand by 2025, following start-up of export projects. This could increase demand for FSRUs and LNG-to-power units, which typically require much less time to begin operations than onshore terminals.

By Samuel Good