Greek Shipping Bets on LNG
Mid to long-term assessments for the expansion of global LNG trade have been eyed by Greek ship owners for quite a while and a series of deals point to massive investments underway. The continuous expansion of natural gas consumption in Asia and the new markets in Latin America, plus the prospective US exports to Europe have certainly provided optimism in maritime business.
At present, Greek shipping companies rank second to the Japanese in terms of LNG transfer capacities. Around 15 billion USD has already been invested for that purpose with most ship building taking place in Korean yards.
The current fleet stands at 31 vessels capable of transferring 3.5 billion cubic metres (bcm) with another 33 are under way to reach a capacity of more than 5.5 bcm. In 2013 the global LNG trade stands at 239m tones according to BG Group, while predictions are that it will increase by 250% by 2030. Japanese fleet owners are for the time being better placed by having already 87 vessels plus another 21 under construction and the Norwegians follow with 30 ships and 10 under construction.
Greek players are making a strong commitment to the sector. The shipping conglomerate of the Angelikousis family has a 2.5 billion USD investment program for 15 LNG carriers under construction in addition to the ten vessels in its fleet. The Livanos family has 9 vessels with plans underway for another 10. Both of these shipping magnates families’ have been in the business since the mid of the 19th century and have managed to change course at the right moment, such as from sail to coal and thereafter to oil. Currently they are major lobbyist for the introduction of gas as fuel for ships.
Other Greek players are also active; the Prokopiou family with seven ships has another three under construction in a 600 million USD deal with Hyundai Korean ship yards. The Martinos family is adding an additional vessel to the two it operates and Oikonomou is getting into the market by aiming to have 4 carriers worth 850 million USD.
According to the consultancy KPMG, ongoing LNG installations worldwide are enlarging in scope and in depth of investments, while around 53 liquefaction and regasification terminals are scheduled with budgets of more than 350 billion USD.
A major role in the overall architecture and power dynamics of the global LNG trade in the coming generation would be played by the role of China, both as a major importer and as a potential maritime super power in that sector, for which it has not really invested presently. Should that change Greek and other entities from small states that depend on international trade and not within the boundaries of their own countries, may find hard time competing due to the sheer economies of scale presented by the Chinese mega groups and the state assistance they get indirectly, notwithstanding national security concerns. In that respect the biggest risk for the Greek entrance into the LNG maritime sector would be a potential antagonism in the future by Chinese companies.