Nakilat has made an $11bn investment in 45 high-tech LNG vessels that offer unparallelled size and efficiency to cut the cost of delivering fuel around the world
Nakilat’s estimated $11bn investment in specialist liquefied natural gas (LNG) tonnage is the largest single merchant marine shipbuilding programme since the -Second World War, when the US commissioned a fleet of so-called Liberty ships to replace destroyed cargo tonnage. The technology and design of the Qatari fleet also sets new standards for the LNG industry worldwide.
By mid-2010, Nakilat will own or part-own 54 LNG carriers, including nine conventional vessels of 145,000-154,000 cubic metres, 31 Q-Flex vessels of 210,000-216,000 cubic metres and 14 Q-Max carriers that are between 263,000 and 266,000 cubic metres and are among the largest ships ever built.
Each of the Q-Flex and Q-Max ships has been named after a town or area in Qatar, with the exception of the fleet’s flagship Q-Max -vessel, the Mozah, named after and sponsored by Sheikha Mozah bint Nasser al-Missned, wife of the Emir of Qatar.
Maximum efficiency When Nakilat took delivery of the 266,000 cubic-metre Mozah from Samsung Heavy Industries (SHI) of South Korea in September 2008, it marked a new era in LNG shipping.
Q-Max vessels, such as the Mozah, set new standards as they can carry 80 per cent more cargo than the conventional LNG carriers, which have dominated the industry for 30 years. They are also designed to consume 40 per cent less energy per unit of cargo.
“We wanted to develop vessels that would allow us to benefit from economies of scale”
Abdullah al-Sulaiti, shipping director, Qatargas
The Q-Flex vessels can carry 50 per cent more cargo than conventional LNG ships. SHI is building 20 of Nakilat’s new LNG carriers.
The Q-Flex and Q-Max vessels will be chartered to Qatar’s two LNG producers, -RasGas and Qatargas. Qatargas will charter 13 of the Q-Max carriers.
The company’s fourth and fifth liquefaction trains – the facilities that make gas suitable for transportation – known as Qatargas II, started up in 2009 and will generate an estimated 50 shiploads of LNG for export a year. Each Q-Max ship can deliver enough natural gas to power 70,000 US homes for one year. Billed as floating pipelines, each ship is 20 -storeys tall and longer than three football pitches.
The sheer size of the vessels creates economies of scale that will cut the costs of transporting LNG by an estimated 20-30 per cent.
Tailor-made to deliver Qatargas II exports, the Q-Max vessels offer lower transport costs, lower emissions and better energy efficiency than conventional LNG carriers, made possible through the development of new engines.
The Q-Max vessels are fitted with two slow-speed diesel engines that are more efficient than steam turbines, aid manoeuvrability and reduce toxic gas emissions. This technology enables the Q-Max ships to cut their fuel consumption by around a third. The Mozah made her maiden voyage in -January 2009, sailing through the Suez Canal to deliver a consignment of LNG to the Port of Bilbao in Spain. The Mozah and her sister ships sail at operating speeds of nearly 20 knots – high speeds that create a typical LNG cargo delivery cycle of around 30 days. The ships have been certified by the UK’s Lloyd’s Register, DNV of Norway and the US’ ABS.
This speed capability should help to deter any attempted pirate attacks as the vessels sail to and from the Suez Canal, although their 23-metre height above the waterline makes them a conspicuous target.
Qatar Petroleum (QP) and the US’ ExxonMobil drew up the blueprints for the Q-Max. They brought together a team of Qatari and expatriate ship operators, naval architects, specialists in hydrodynamics and structural engineers to develop and test the tank designs.
The experts looked at the best ways to harness efficiency through adapting technology to increased ship size. QP and ExxonMobil then invited shipbuilders to submit designs that did not compromise on safety or reliability.
“Because of Qatar’s location in the gas market relative to the world we wanted to develop vessels that would allow us to benefit from economies of scale,” says Abdullah al-Sulaiti, shipping director and project team member at Qatargas. “We looked at conventional ships, but they did not serve our needs.
“So, Qatar Petroleum and its partners put together a team to develop tonnage that would work for us. We went through a number of designs – Q-Max, Q-Flex, Superflex and Supermax – looking at different containment systems. Finally we decided – because of the size and economics – to go with the membrane system.”
Membrane containment tanks reduce the danger of cargo shifting and destabilising the vessel while it is in transit. The ships also feature twin propellers and rudders, state-of-the-art anti-fouling protection and improved fire protection systems.
“We wanted to maximise the economies so that whatever we loaded, we were also able to deliver,” says Al-Sulaiti. “So we briefed the team to look at the possibility of installing onboard reliquefaction systems.”
Conventional LNG carriers use boil-off gases to power their journey, which means a 30-day trip would reduce the final cargo volume by 3-5 per cent, and more on long-haul voyages. Every new Nakilat ship is now fitted with an onboard reliquefaction system, developed by the UK’s Hamworthy and France’s Cryostar. These liquefy vaporised gases created during transit and reinject them into the cargo tanks in order to prevent wastage.
One constraint of the design was size. The ships need to carry the maximum amount of cargo while still being able to operate at as many of the world’s LNG ports as possible. The Q-Max ships were built to be the largest vessels that Ras Laffan, the port serving Qatar’s North Field, can handle.
The Q-Max has a 12-metre draft (the distance between the waterline and the bottom of the hull), comparable with that of a modern container ship and only a little larger than the conventional LNG carrier’s 11.5 metre draft.
Designed for maximum manoeuvrability while in port, Q-Flex ships use about 40 per cent less energy than conventional LNG carriers. They also emit around 40 per cent less carbon while carrying about 1.5 times more cargo.
It took just over a year from initial discussions to first delivery of the new tonnage. -Daewoo Shipbuilding & Marine Engineering delivered the first new Q-Flex vessel to Qatar in 2007, following negotiations between Qatar and South Korea that secured the best possible outcome for the QP project team.
“Our requirements, in terms of ship numbers, were huge,” says Al-Sulaiti. “So, we had to come up with a way to ensure a competitive shipper price – setting the right delivery schedule was critical. Given the magnitude of the project, it would have been very difficult to tender the project in the conventional way, when you issue the tender to the ship-owner, and the ship-owner secures both the slots and the price from the yard.
“We decided to approach the yards ourselves, securing a pro-forma contract and reserving around a hundred slots over four to five years. This allowed us to protect ourselves against market fluctuations and worked very well for the project, allowing us to achieve a good price and to schedule deliveries to match the start date of the new LNG trains.”
Nakilat took delivery of its final new Q-Flex vessel, the Al-Bahiya, at the end of 2009. The final three new ships, Q-Max vessels the Zarga, the Aamira and the Rasheeda, will be delivered from South Korea by this summer. While the vessel designs belong to the shipyards, Nakilat is so far is the only ship-owner to order this kind of tonnage.
Al-Sulaiti maintains that the new design will make all the efficiency savings the project team had hoped to achieve. “We are delivering larger quantities [of LNG] to our markets on every single ship,” he says. “This delivers economies of scale and ensures that the unit costs of our transport are competitive compared with those of conventional carriers.
“We also benefit from fuel savings compared with conventional ships, as all our new ships are fitted with slow-speed diesel. So overall, we are convinced the project made the right decision to go with the configuration we have today. With the Q-Flex and Q-Max, we can be competitive in all of today’s markets – whether in the Far East, the US or in Europe.”
As well as deploying technology to build the world’s most modern LNG fleet, Nakilat is keen to achieve technology transfer in ship management too.
At the moment, all fleet management is contracted out to partner companies. The 29 jointly owned carriers – nine conventional carriers and 20 of the new Q-Flex ships – are managed by Nakilat’s eight partner lines. These include some of the biggest names in shipping: Japan’s big three lines MOL, K Line and NYK, along with Greece’s Maran Gas Maritime, Canada’s Teekay, India’s Petronet LNG, the US’ OSG and Germany’s Pronav.
Meanwhile, the 25 wholly owned Nakilat vessels are managed by Shell International Trading & Shipping Company (Stasco) out of the UK. Stasco provides the crew and operates the ships through a master services agreement, signed in 2006, which will end eight to 12 years after delivery of the final Q-Max.
At this point, Stasco will transfer full management of the vessels to Nakilat as part of a technology transfer strategy intended to extend control over operations as well.
While the partnership with Stasco makes practical training possible, Nakilat also wants to develop a marine academy to train Qataris and other nationals for seafaring roles.
It has submitted a proposal outlining the academy’s practical and funding needs to the board of the Qatar Foundation for Education, Science & Community Development, the state-backed non-profit organisation headed by Sheikha Mozah, which is charged with investing in and developing the country’s education, training and human resources.
“We want to bring the world’s leading marine academy to Qatar,” says Muhammad Ghannam, managing director of Nakilat. “We are not prepared to compromise – we want the best. We have submitted our proposal to the Qatar Foundation board and hope to win approval for the project and the funding.
“We already have a partner school in mind of Ivy League standard. The training would cover ratings, officers and naval -architects as well as personnel for the Qatari navy.”