Malaysia's MISC to Build LNG Vessels with Long Term Charter in Hand

MISC Berhad (MISC) said its LNG shipping segment will stick with its strategy of only building vessels with long term charters in hand as vessel oversupply continues.

MISC, which is a subsidiary of Petronas, stated existing long-term charter contracts continued to provide income stability as it supports Petronas’ LNG shipping requirements. The information was provided by the company in its 2015 Sustainability Report, covering the company’s commitment, strategy and performance for the year ended 31 December 2015 and progress towards its sustainability goals. The reports was released on Friday. 

In 2015, a contract novation from Petronas was secured for five new LNG carriers together with a 15-year long term charter contract. MISC also secured the charter extension for five Puteri Class carriers on a time charter basis for the next 10 years.

Last year, MISC delivered 20.7 million tonne (mt) of LNG, representing 8.3 per cent of total world LNG trade.

Although the LNG shipping market continued to remain weak with softening spot charter rates and an oversupply of LNG vessels, the year saw the Group expanding its presence in Australia. Its vessel, Seri Bakti, became the first vessel to berth at the Santos GLNG terminal in Curtis Island and successfully completed loading and delivery of LNG to the Pyeong Taek terminal in South Korea.

In 2015, the vessel availability rate for company’s LNG and chemical fleet was 99.8 percent, surpassing industry benchmarks across all segments of the shipping sector, the company said.

Focus areas for the company in next five years would be to pursue more third-party time charters and, at group level, to achieve a sustainable return on average capital employed of more than 10 per cent by 2020.

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