Regional LNG: Malaysia?s MISC to gain from LNG demand
Thursday, November 18 2004 - 03:50 AM WIB
?At times when crude oil prices look set to remain high despite the recent falls, countries worldwide are looking increasingly to other forms of energy, such as natural gas, in particular, given that it generates less pollution,? OSK Research senior analyst Chris Eng said in a research note released Wednesday.
He also believes that the LNG shipping business will remain MISC?s brightest prospect given the increasing demand in non-traditional markets such as the US and the completion of the LNG receiving terminal in the UK in 2007, partly owned by Petroliam Nasional Bhd.
Eng said the opening of the Milford Haven terminal will likely see MISC using some of its vessels to transport LNG from Northern African countries such as Egypt to the UK.
?The main risk for MISC is that countries such as Qatar also plan to build a big LNG fleet, with Qatar aiming to increase its fleet from the current 20 to 77 ships by 2010,? he added.
As for crude oil transport, Eng said that MISC, with its current fleet of 40 Aframax and product tankers, will benefit substantially from the surge in crude oil demand.
The Baltic Dirty Tanker Index, which tracks rates for crude oil tankers, has reached a three-year high on strong demand for ships to transport crude oil ahead of the winter months.
Spot rates for Aframax tankers have reached US$55,000 a day on some routes, while breakeven rates are generally about US$13,000 to US$17,000 a day.
Although the research firm does not expect these rates to be sustainable, it sees financial year 2005 as a bumper year for crude oil vessel owners.
With most shipping rates seen moderating from 2005, MISC?s main driver of growth will be from the expansion of its LNG, Aframax and very large crude carriers. (*)