October 20, 2003BG orders LNG ships
BG Group has entered into an agreement with Samsung Heavy Industries Co. Limited of Korea to purchase three newbuild liquefied natural gas (LNG) ships.
The three 145,000 cubic meter ships are expected to be delivered in the second half of 2006. BG has also secured options with Samsung for up to a further four newbuild ships for delivery in 2007. In total, the cost of the three ships and the options will be approximately $460 million.
BG Group has its roots in the former British state-owned British Gas corporation. In January 2002, a wholly owned subsidiary, BG LNG Services, took 81 percent of the capacity at North America's largest operating LNG import terminal, Lake Charles in Louisiana, which has the capability to receive, store, vaporize and deliver an average daily send-out of 4.7 million tonnes per annum (mtpa). From September 2005, BGLS will take 100 percent of the capacity. In March 2003, the Federal Energy Regulatory Commission gave approval for expansion of the terminal to 8.9 mtpa. Construction of the expansion plant is expected to be completed by the beginning of 2006.
BG Group is involved in developing LNG projects in Trinidad & Tobago, Egypt, Italy, India, Indonesia, Bolivia and Iran.
Martin Houston, Executive Vice President and Managing Director, North America, Caribbean and Global LNG, said the Samsung contract "reflects the successful development of our long-term Atlantic LNG strategy and secures shipping capacity in 2006 and beyond. There is significant potential within the whole Atlantic Basin region to accelerate further our LNG business and these new ships will help BG build its position as a leading player in LNG."
Samsung will build, equip, launch and deliver the ships using the GTT MkIII membrane cargo containment system. The vessels will use steam turbine propulsion, enabling them to sail at an average speed of 20 knots.
BG Asia Pacific currently owns two LNG ships (Methane Arctic and Methane Polar) which are on long-term charters in the Atlantic Ocean and Mediterranean Sea. Methane Services Ltd (MSL), a wholly owned subsidiary of BG Group, also charters four ships from Golar LNG (Hilli, Gimi, Khannur and Freeze), all of which are contracted to either long-term or short-term sub-charters. MSL also has commitments to take delivery of two new LNG ships under long term charter in mid 2004 (Methane Kari Elin and Methane Princess).