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Nakilat’s role as a key supporter of Qatar’s ambition

Thu 08 Mar 2018 by Craig Jallal, tankers and markets editor

Nakilat’s role as a key supporter of Qatar’s ambition

Qatar is on the brink of an expansion that could increase LNG exports by 30%. LNG World Shipping reviews the Qatar Gas Transport Company Limited (Nakilat), a company whose main purpose is to support Qatar’s ambition to dominate global LNG supply.

Aiming to be the largest supplier of LNG in the world

Nakilat’s main role is to support Qatar’s often stated ambition of being the world’s largest supplier of LNG. Established in 2004 (see milestones), Nakilat manages the shipping requirements of Qatar’s LNG and associated products (eg LPG) to global markets. Nakilat has a strategic long-term charter agreement with the world’s largest LNG producer Qatargas. Qatar remains the world’s top LNG exporter. Around 78M tonnes was loaded in 2017, which accounted for 26.6% of the global trade in the product. In this respect, Nakilat is responsible for the transportation of LNG produced in Qatar to global markets.

Nakilat’s LNG and LPG vessels are trading worldwide, either managed inhouse through the subsidiary Nakilat Shipping Qatar Ltd (NSQL) or by Shell International Trading and Shipping Company Limited (STASCO), as well as joint venture partners such as MOL, NYK, K Line, Maran Gas, Teekay, International Seaways, Pronav and SCI. This role is expanding and in March 2018, Maran Nakilat Company Ltd, a joint venture between Nakilat and Maran Gas, announced a new agreement which increases the number of vessels jointly-owned by Nakilat and Maran Gas from 13 to 15. The two newly added vessels, Woodside Rogers and Woodside Goode are equipped with dual-fuel diesel-electric propulsion with a capacity of 159,800 m3 each.

Ownership structure

Nakilat has a somewhat more complicated ownership structure than often realised. The company is 51%-owned by a range of Qatar state-owned entities, with the remainder of the shares quoted on the Qatar Stock Exchange.

Subsidiary roles

Nakilat Shipping Qatar Limited (NSQL) is a wholly owned subsidiary of Nakilat, responsible for the inhouse ship management of a number of the fleet’s vessels. At present, NSQL manages 18 vessels, comprising of 14 LNG (eight Q-Flex, six Q-Max) and four very large gas carriers (VLPGs). The VLGCs were ordered in 2005 and delivered in 2008 and 2009.

They are jointly owned by Nakilat and Milaha and have a capacity of 84,000 m3 each. Nakilat acts as the commercial and technical manager for these vessels, which are currently chartered by Shell, Glencore and Gunvor. According to Nakilat, while its main business focus is in LNG shipping, it also monitors the LPG sector closely to take advantage of any associated business opportunities that may arise.

All 65 Nakilat LNG carriers are fixed on long-term charters and the company does not charter in any vessels. If a vessel was to come off charter, based on market conditions, commercial drivers and industry relationships, Nakilat may charter the ship out directly to charterers or use a shipbroker.

Nakilat driving Qatarisation

In line with Qatar’s National Vision 2030, the development of a sustainable Qatari workforce is one of the key priorities at Nakilat. The aim is to ensure Qatari nationals are provided with ample opportunity to develop their careers to enable them to eventually take on positions of higher responsibility. As at December 2017, the company had achieved a Qatarisation level of 41.7%.

Dual-fuel trial

Nakilat was the first company to undertake the conversion of conventional MAN diesel engines to a dual-fuel, M-type, electronically controlled gas injection (ME-GI) set-up. The retrofit was carried out on the pair of engines driving the 266,000 m3 Rasheeda, one of its Q-Max LNGCs.

However, according to Nakilat, any decision to retrofit the remaining fleet is one that must be driven by the charterers in co-operation with Nakilat.

 

Significant milestones in the development of Nakilat

In addition to its core shipping activities, Nakilat operates the ship repair and construction facilities at Erhama Bin Jaber Al Jalahma Shipyard in Ras Laffan Industrial City via two strategic joint ventures: Nakilat-Keppel Offshore & Marine and Nakilat Damen Shipyards Qatar. It also provides shipping agency services through Nakilat Agency Company at all Qatari ports and terminals, and towage and other marine support services through its joint venture Nakilat SvitzerWijsmuller for vessels at the Port of Ras Laffan and around Qatar’s Halul Island.

Nakilat’s business portfolio extends beyond shipping to include a comprehensive range of maritime services, complementing Nakilat’s vision to be a global leader and provider of choice for energy transportation and maritime services.

There is no question that Nakilat has become, size-wise, a world leader in LNG shipping. The current LNG and LPG fleet represents a total investment of approximately US$11Bn and it has a combined carrying capacity of over 9M m3 or approximately 12% of the world’s LNGC capacity.

Nakilat has 69 vessels in its fleet, which is made up of 65 LNG and 4 very large LPG carriers. Of the 65 LNG carriers, 25 are wholly owned by Nakilat while the remaining 40 vessels are jointly owned. With regards to the jointly owned vessels, Nakilat’s ownership ranges from 20-60%, with an aggregate average of 45%.

  • 2004 Nakilat established as shipping arm of Qatar’s LNG sector.
  • 2005 Nakilat’s shares are listed on the Qatar Stock Exchange.
  • 2005 Nakilat takes delivery of its first LNG carrier.
  • 2005 Nakilat Agency Company is established.
  • 2006 Nakilat formed strategic alliance with STASCO for management of its 25 wholly owned LNG carriers.
  • 2006 Nakilat awarded a 25-year time charter contract by Qatargas for 24 LNG carriers.
  • 2008-2009 42 LNG carriers and 4 LPG carriers are delivered to Nakilat.
  • 2008 Nakilat takes delivery of Mozah, the first Q-Max LNG carrier.
  • 2008 Nakilat-Keppel Offshore & Marine is established.
  • 2010 Nakilat Damen Shipyard Qatar is established.
  • 2011 Erhama Bin Jaber Al Jalahma Shipyard started operations.
  • 2012 wholly owned subsidiary Nakilat Shipping Qatar Ltd (NSQL) formed and assumes management of four LPG carriers.
  • 2014 NSQL assumes management for first the four LNG carriers.
  • 2015 Nakilat completes the world’s first ME-GI conversion for a Q-Max LNG carrier.
  • 2017 Nakilat completed the first phase of the fleet management transition for 10 LNG carriers from STASCO.
  • 2017 Nakilat recognised as one of the top performing companies in Qatar by Forbes Middle East.
  • 2017 Nakilat signed an alliance agreement with Höegh LNG to explore FSRU collaboration opportunities.
  • 2017 Nakilat named as one of the winners of the British Safety Council’s International Safety Award.

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