Natural gas has become an increasingly attractive fuel source over the past decade and its usage is expected to grow in the coming years.

Dear Reader,
Natural gas has become an increasingly attractive fuel source over the past decade and its usage is expected to grow in the coming years. Burning LNG produces less carbon emissions than burning both oil and coal; hence this will make a significant contribution to reducing the environmental impact. The LNG industry is a highly capital intensive, technologically sophisticated and expensive business which involves gas field production, gas liquefaction, shipping, re-gasification and finally gas distribution. This industry has traditionally been a highly structured one (contracts of 20 years or more), but we have lately seen a growing market for short-term contracts (less than four years) and also spot cargoes. Soon we will also see new ways of transporting natural gas by sea, for example as Gas-to-Liquids (GTL) and Compressed Natural Gas (CNG). CNG has the potential to economically unlock vast reserves of already discovered gas considered to be stranded in small reservoirs for which existing technologies prove uneconomical or associated gas in existing oil fields and bring that gas to market. The potential here is huge – as about half of all known gas reserves are considered to be stranded or associated. We believe the first CNG carrier project will materialise in this decade.
In addition, we have over the past few years seen a shift towards more cross-Atlantic trading and possible trading in colder climates for LNG ships. The new trades will take place in harsher and more demanding environments than the eastbound ‘energy’ trades we have from the Middle East. The design of vessels for these new trades will enhance operational flexibility and operation with partially filled tanks. In short: the LNG trade will in the future also face challenges and DNV is prepared to share its expertise and knowledge with the whole industry with the aim of ensuring safe and environmentally friendly gas transportation. Happy reading!

Johan Petter Tutturen,
Business Director – Tankers
DNV Maritime

Date: 2008-03-14