Ship owner Qatar Gas Transport Co (Nakilat) said a decision on whether to convert 45 of its largest tankers to burn natural gas instead of oil “continues to be under consideration” but would not impact the company financially in any event.
The company is about to approve a $1 billion overhaul of the tankers, prompted by an unexpected fall in natural gas prices compared with the price of oil in recent years, senior industry sources told Reuters last week.
The work will take place between 2012 and 2015, the sources added. The tankers are designed to transport liquefied natural gas (LNG).
“The decision on whether or not to refit the LNG fleet with engine capabilities to burn LNG fuels is an issue that has been and continues to be under consideration by Nakilat’s charterers,” the company said in a statement posted on the bourse website.
“To date the charterers have carried out a study addressing the availability of reliable technology and of the economics associated with using LNG fuel versus bunker fuel in the operation of the LNG vessels.
“If a decision is made to proceed with the refitting of some of the vessels, the charterers of those vessels will bear the full cost of this refit, with no financial impact to Nakilat,” the statement said.
Hire rates on LNG tankers have more than tripled to $115,000 per day compared with last year due to scarce availability.
Sources say Qatar’s plan to replace idle tonnage by hiring new vessels will exacerbate shortages and drive rental rates yet higher.
Shipping brokers and analysts also say the refit program and consequent idling of Qatari tonnage will push day-rates on LNG carriers even higher.
Several sources in Europe and the United States confirmed that LNG producer Qatargas was quietly looking to charter tankers in the second half of 2012, when refit work is expected to commence.
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