Market review In 2016, an oversupply of LNG compounded by plunging gas prices negatively impacted the LNG shipping market. Despite this, LNG supply grew by more than 15 million tonnes for the year with Australia alone contributing 14 million tonnes. This was however dampened by several notable outages in Nigeria, Trinidad, Yemen and Egypt which saw charterers reluctant to charter on a long-term basis thus pressuring rates downwards. The LNG shipping market continues to be a charterer’s market with a choice of options available for spot charters. Key developments In September 2016 and January 2017, MISC took delivery of the Seri Camellia and Seri Cenderawasih MOSS-Type LNG carriers at the Hyundai Heavy Industries Co., Ltd. (HHI) shipyard in Ulsan, South Korea. These 150,200-cubic metre (CBM) carriers are the first two in a series of five MOSS-Type vessels ordered from HHI. Part of the new generation Seri C Class LNG fleet, they offer a more robust and superior cargo containment system and ensure a higher degree of operational flexibility for MISC to operate in harsh meteorological conditions. These new LNG carriers which are chartered to PETRONAS for the next 15 years will strengthen MISC’s leadership position in the global LNG transportation business. They bring the current number of MISC’s LNG fleet to 26 LNG vessels and two FSUs today, further cementing MISC’s position as a reliable and safe transporter of LNG. The remaining three vessels are currently under construction and will be completed on a staggered basis and delivered to MISC in due course over the next two years. MISC today remains one of the world’s largest single owner-operators of LNG vessels and has safely delivered more than 400 million tonnes of LNG for more than 30 years. In 2016, we delivered 21.64 million tonnes of LNG, carving around 8% of the total world LNG trade. The year also saw the FSU Tenaga Satu and FSU Tenaga Empat being retrofitted with smaller deck boilers which will bring significant cost savings in terms of fuel consumption and improved operational efficiencies over the remaining tenure of the 16-year charter. In September 2016, Asia LNG Transport Sdn. Bhd., a subsidiary of MISC, signed a 10-year Time Charter Party contract for the Aman Sendai with Malaysia LNG Sdn. Bhd. Performance Review 61
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