Moving forward The LNG Shipping landscape is changing as spot or short-term charters become the norm given weakening rates and a persistent oversupply. Charterers, no longer keen on chartering LNG vessels on a long-term basis, are now securing vessels for a mediumterm tenure of between 7 and 10 years at lower rates resulting in a lower return on equity to ship owners. The year ahead will see a continued growing preference by charterers for newer, bigger and more fuel efficient LNG carriers compared to the steam vessels further impacting an already unfavourable market with reduced spot charter rates. This has already affected two of our vessels, the Seri Bakti and Seri Anggun. Growth opportunities for new LNG shipping projects have also been stifled with many LNG liquefaction project owners postponing their final investment decision due to unfavourable market conditions. To remain profitable, the segment will also explore the possibility of nonconven t i ona l LNG sh i pp i ng and alternative LNG floating solution projects in key LNG demand centres and emerging economies. LNG SHIPPING MISC BERHAD • Annual Report 2016 62 President/Group CEO’s Review and MD&A BUSINESS SEGMENT AND OPERATIONS REVIEW
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