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as vessels are built with some flexibility in case projects fail. “That flexibility is going to cost a little more but will give some insurance,” he said.

Initial shipyard price indications have suggested that these will be comparatively high priced ships. But one broker, who preferred not to be named, says prices will only prove challeng-ing if yards do not know how to price the risk they are dealing with on the vessels.

He says Chinese shipbuilders have a good understanding of how to price small gas carriers and the equipment they require, adding that it is possible to order “a perfectly acceptable 5,000-cbm LNG bunker barge” equipped with flexible hoses for prices in the region of $28m to $30m.

Brokers who have taken a specialist interest in the small-scale sector, like Affinity LNG partner Mats Fagerberg, report that typically the industry is seeing an interest in 7,000-cbm to 8,000-cbm size LNG carriers, which are there to serve projects but have some ability to bunker when that need grows.

Valkier said: “What you see in Europe is bunker ships are around 6,000 cbm to 7,000 cbm. Whether that will be the right size for other areas will be the question. It’s a new market and you have to look at it with specific situations.”

Type C cargo tanks have emerged as the preferred option for the bulk of the small-scale LNG carriers ordered to date, although one membrane ship has been contracted. Owners operating small gas carriers are more familiar with Type C, Perez says, and the tanks are more of an off-the-shelf product. Membrane-type systems can offer advantages where shallow-draught or much larger vessels are required, he adds.

Perez, who says he gets calls from “unbelievable places” on small-scale LNG, says there are many projects under considera-tion but most are at the very early stages and only one in 20 or 30 will go to the next stage.

He says local politics will play a key part in what is possible to achieve.

Perez also stresses that projects will often stay under the ra-dar until the last minute as the sector is “very competitive”.

“The market is about to come out but whether it will take one year, five years or 20 years that is the question,” Perez said.

Small-Scale lNG ShippiNG is still in its infancy but is start-ing to draw a crowd as industry players wake up to the potential for both trading and bunkering LNG in smaller quantities.

Some like Dutch shipowner Anthony Veder have already es-tablished a presence, with three small Veder ships trading LNG and another pair of newbuildings on order against long-term contract business.

Others like NYK, French partner Engie and Mitsubishi Corp, which is set to take delivery of what will be the world’s first pur-pose-built LNG bunker tanker newbuilding next year, are set to make a play.

There are those like Japanese shipbuilder Mitsui Engineer-ing & Shipbuilding (MES), which appears to be positioning it-self with the company’s recent buyout of German specialist TGE Marine in a bid to further the yard’s business in medium-size multi-gas carriers.

And there are more who are adopting a watching brief. This month Hoegh LNG president and chief executive Sveinung Stohle told TradeWinds that his company has set up and as-signed some senior staff to a new business unit for small-scale LNG.

“We haven’t decided if we want to go into this segment but we have received interest and enquiry, so will have a look over the next year,” he said.

Defining the true size of the small-scale LNG orderbook and even the existing fleet can prove tricky.

There is no accepted definition as to what constitutes a small-scale LNG carrier, with each broker and consultant choosing seemingly arbitrary cut-off figures. But several seem to be hom-ing in on the 30,000-to-40,000-cbm range as the upper cut-off.

On this basis, Clarksons’ SIN database lists 26 existing ships and a further 13 on order.

Some, however, like Evergas’ six 27,000-cbm multigas new-buildings — two of which have been delivered — were specifi-cally contracted to ship ethane from the US under 15-year time-charter contracts with Ineos. The ships have been deliberately over-engineered to allow them to carry LNG. Brokers explain that this gives them a built-in flexibility in case trades change and for possible redeployment at the end of their contracts.

Anthony Veder chief executive Jan Valkier has first-hand ex-perience of the small-scale LNG sector.

Valkier says there are one or two projects moving in Europe at present. He identifies the Caribbean and Mediterranean as other areas that have been exploring small-scale LNG and may offer some opportunities.

He sees Indonesia as having big potential for small-scale LNG shipping with Singapore and the Chinese coast being other likely regions, although the latter, he suggests, may be snapped up by local business interests.

Projects can get delayed or never materialise, Valkier says. But he also cautioned: “The low oil price is not helping much in this business.”

Consultant Eduardo Perez from Small-LNG believes the in-dustry is going to see great variety in the small-scale LNG fleet

Small-Scale lNG ShippiNG prepareS for the biG timeLow oiL prices might not be encouraging but companies are positioning themseLves to pLay a roLe in an emerging sectorLucy Hine London

aNthoNy Veder chief executive Jan Valkier says the small-scale LNG ships that have been ordered and are being tendered for at present are designed for specific projects.

That said, he says there is an element of speculation in ships like NYK and Engie’s LNG bunker vessels in that not all the ves-sel’s capacity has been committed.

Others following the small-scale sector point to the 6,500-cbm LNG bunker vessel Shell has contracted at STX Offshore & Shipbuilding that will load out of the Gate LNG terminal in Rot-terdam. They explain that it is only energy majors and other large entities who either have control along the LNG chain or sufficiently deep pockets that can go ahead with purpose-built orders like these.

The existing small-scale LNG fleet is already being put to some creative use.

Veder’s 6,500-cbm Coral Anthelia (built 2013) recently sup-plied LNG bunkers to the 25,000-dwt Bit Viking (built 2006) in a ship-to-ship operation off the Norwegian coast.

project-backed ShipS poiSed for creative playBrokers say IM Skaugen’s multigas vessels have been

used to commission Jovo Group’s and later CNOOC’s Hainan terminals in China by shipping volumes re-exported from CNPC’s Dalian LNG import facility. One of the vessels has re-cently shipped a fourth LNG cargo from Bintulu in Malaysia into Hainan.

“All these little things keep appearing,” said one broker who expects the sector to blossom in time. “It just keeps trickling over.”

For the foreseeable future, Valkier thinks existing small-scale LNG ships will continue to be used both as bunker and feeder vessels. In the long run this might separate, so the in-dustry has more specific bunker vessels, he says, but the mar-ket is too small for this at present.

“It ultimately should split,” a specialist broker said, “but I wouldn’t recommend anyone set up a stand-alone LNG bunker-ing set-up. It just wouldn’t work. It needs a baseload customer for the business to stand on its own two feet.”

Small-scale player Anthony Veder.

Photo: Lucy Hine

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Anthony Veder’s 15,600-cbm Coral Energy.Photo: AntHony Veder

consultant eduardo Perez (above) from

Small-LnG and Anthony Veder chief executive Jan

Valkier.Photos: Lucy Hine