LNG Market Prospects Mr Jae Sung Choi 1 st November, 2017
CONTENTS I. Introduction of Clarksons Platou Korea II. III. IV. LNG Trade Overview (Exports & Imports) LNG Value Chain LNG Carrier Market Overview Fleet Development vs Export Capacity Growth V. FSRU Market Overview VI. South Korean Shipbuilders Position in LNG Market 2
I. Introduction of Clarksons Platou PLC Established by Horace Anderton Clarkson in 1852 (165 years of history) Listed at London Stock Exchange (CKN.L) in 1986 Member of FTSE 250 Broking Time / Spot Chartering Cargo Chartering Sale & Purchase Newbuilding Demolition Finance - Provide services in 17 sectors - Dry Cargo, Tankers, LNG, LPG, Offshore, Container, PCTC etc. Support Provide supports with 24/7 attendance at wide range of strategically located ports - Clarksons Port Services - Freight forwarding & Logistics - Gibb Tools & Supplies Financial Provide finance and debt solutions to help clients manage risk, fund transactions / Freight & Commodity Future broking - Clarksons Platou Futures - Clarksons Platou Asset Finance - Clarksons Platou Securities - Clarksons Platou Project Finance Research Provide intelligence on global shipping - Offshore and Energy - Shipping and Trade - Valuations 165 YEARS 1,398 EMPLOYEES WORLDWIDE 49 OFFICES 21 COUNTRIES
I. Introduction of Clarkons Platou Korea Current Position of Korean Shipping & Shipbuilding Industry The current atmosphere of Korean shipping and shipbuilding is under the stage of restructure and consolidation. The Korean government is continuously showing their strong intention to consolidate and centralize the key functions and resources through establishing government organizations (ex Korea Shipping Partners, Korea Maritime Corporation) Objectives of Clarksons Platou Korea Clarkson Platou Korea aim to be each client s (shipping companies & shipyards) advisory role for establish mid-long term plans supported by Clarkson Platou s intelligence and global network. Clarksons Platou Korea will be able to provide services as follow: - Market Research (provide excellent market intelligence, database, research products to meet up each client s needs) - Sale and Purchase (Advice vessel replacement strategy against volatile market through second hand transactions for each client s needs) Newbuildings (Interlink communication role between government banks and shipbuilders and advice restructure plan) - Project finance (interlink communication role between private senior banks, equity funds, government financial institutions and each clients) Clarksons Platou Korea will focus on restructuring and debt advisory service - Provide precise assessment of each financial institutions and shipowner s assets (fair market value) against ship mortgage and provide the strategic guideline against the volatile market Clarksons Platou Korea s local presence will strengthen the relationships with shipowners, shipbuilders and financial institutions and we will closely configure each client s demands and provide appropriate advices to help them for right decision.
II. LNG Trade Overview (Global Monthly LNG trade)
II. LNG Trade Overview (Exports Jan/Aug 2017)
II. LNG Trade Overview (Imports 1 st Half 2017)
II. LNG Trade Overview (Trade Patterns)
III. LNG Value Chain (Up-Mid-Down Stream) Liquefaction Capacity = Supply Re-gasification Capacity = Demand Source: Exmar IR
IV. LNG Shipping Market Overview - Fleet Development (Supply)
IV. LNG Shipping Market Overview - Exports Capacity Growth to 2020 (Demand)
IV. LNG Shipping Market Overview - Exports Capacity Growths to 2020 (Demand)
IV. LNG Shipping Market Overview - Utilization Rate LNG fleet utilization is expected to start improving through 2017 as the tonnage demand growth is expected to exceed the supply growth. From 2017 the shipping demand growth will also be driven by an increase in average distance with the ramp up of US exporters. If global liquefaction capacity will produce at ~88%, the LNG trade will reach ~400mt by 2021, resulting in a > 85% fleet utilization from 2018. Short Term: Increasingly dynamic shortterm/prompt shipping market Mid Term: Shift in market balance the growth rate of LNG production will exceed the growth of the fleet during this time frame Long Term: Expected to grow at 5-6% per annum through 2025, adding over ~140 mpta of new LNG demand to the current ~270 mtpa
IV. LNG Shipping Market Overview - Increased activity in spot chartering
IV. LNG Shipping Market Overview - Spot Fixtures by Vessel Propulsion Type The nature of new spot trades, servicing larger parcels in conjunction with the structure of available fleet have transformed the spot shipping market to TFDE market, with ST competing in more niche trades.
V. FSRU Market Overview (Floating Storage Regasification Unit) A fairly new trend in LNG market. There are 24 units in operation and 13 units on order. Approximately 40 FSRUs will be operational by 2020. Greater flexibility A temporarily solution while the onshore terminal is being built. Can be redeployed at a different location, once construction is finished. Lower cost Approximately 50 60% of a new onshore terminal. Faster project scheduling Can be delivered in a shorter time than onshore terminal. Source: Clarksons Research Source: Clarksons Research
VI. South Korean Shipbuilders Position in LNG market South Korea has been the dominant builder country within LNG sector since the early 2000s. LNGC orderbook is split between South Korea (68%), Japan (21%), and China (10%) as of 1 st, Apr. South Koreans also enjoy a competitive advantage of top-level LNG technology in FSRU market. South Koreans competitive edge Proven track record World leading LNG carrier construction and delivery experience High productivity Shorter construction period with relatively lower cost LNG technology Highly developed technology in a wide range of technical fields led to a large portfolio of LNG relevant patents. Source: Clarksons Research Source: Clarksons Research
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