Stolt-Nielsen Eyes LNG Distribution Projects

Oslo-listed shipowner Stolt-Nielsen Limited plans to build a global business of small-scale regional LNG distribution projects, focusing on terminals in strategic locations, which would be serviced by a flexible fleet of ships, the company said.

The shipowner added that these LNG distribution projects would be underwritten by a committed base load demand.

The company is also looking to develop an integrated model to include sourcing of LNG, shipping to small scale terminals (10,000 cbm – 30,000 cbm) and distribution from the terminals
via truck and ISO containers to the end user.

According to Stolt-Nielsen, the company is seeing potential projects in the Mediterranean, Caribbean, South America, India, Indonesia, Africa and Canada.

The projects would have an aim to service stranded-demand customers out of reach of conventional pipeline gas. Stolt-Nielsen noted that the “off-take agreements are currently in the 10-15 year range with suitable counterparty credit.”

“I think this is a huge growth area for Stolt-Nielsen,” the company’s CEO Niels G. Stolt-Nielsen said, adding that the LNG segment could prove to be of grate value to the firm.

Stolt-Nielsen earlier issued a guarded outlook for Stolt Tankers despite improved operating results in the first six months of 2016, saying that the division might be facing delays and cancellations of newbuildings.

“Going forward, we remain guarded with respect to the outlook for Stolt Tankers in 2017 and 2018. The orderbook stands at 27% of the existing fleet, but it remains unclear how this will ultimately play out, as some delays and cancellations of newbuildings seem increasingly likely. Also, higher exports of certain commodity chemicals from the U.S. Gulf are pulling tonnage out of our niche market in specialty chemicals, thus helping to maintain our freight rates,” Stolt-Nielsen said.

The company reported its net profit at USD 37.8 million for the second quarter ended May 31, 2016, up from a net profit of USD 30.4 million seen in the first quarter of the year.

The revenue for the period also increased to USD 478.9 million, from USD 464 million seen in the first quarter of 2016.

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