Japanese shipping company Kumiai Senpaku has diversified into the small LPG carrier market with a newbuilding.
Company subsidiary Kumiai Navigation has ordered a 5,000-cbm vessel at Sasaki Zosen for delivery in July 2019.
Speaking to TradeWinds, Kumiai Navigation managing director Tomomaru Kuroyanagi confirmed it has booked the gas carrier and added that the order sets up a new challenge for Kumiai Group, since the smallest LPG ships it currently owns are of 11,000 cbm.
“We believe the future of the LPG sector will be bright,” said Kuroyanagi. “Oil companies such as Astomos and Statoil are promoting the use of LPG as marine fuel and if this concept is to be realised, the demand for pressurised LPG cargoes will increase significantly. We have to prepare for this.”
He said the 5,000-cbm newbuilding did not have a charter.
“There are companies out there seeking for ships of such size. Statoil is one of them and we are bidding for this project too,” he said.
According to one Asian-based gas shipping source, the recent purchase by Vietnam’s FGAS Petrol of two LPG carriers — the 5,029-cbm Epic St John (built 1998) and 3,500-cbm Sea Sawasdee (built 1995) — is an indication that demand for ships of this size is rising.
“The current charter rate [for] small LPG tankers is around $300,000 per month as compared to last year’s low of $200,000 per month,” said the gas player.
Kumiai Navigation did not disclose the price of the LPG newbuilding but said the vessel would be built to IMO Tier-III emissions standards and will be fitted with scrubbers. The company is planning to include an optional vessel and discussions are ongoing.
“The order of the 5,000-cbm gas carrier newbuilding is in line with our group’s plan, that is to expand into every size of the LPG sector,” said Kuroyanagi.
Kumiai Navigation has seven VLGCs including two newbuildings, one 38,000-cbm ship and two 11,000-cbm vessels.
“Comparing ourselves with big gas shipping players, we are small but we will keep focusing on this LPG sector based on our 35 years of experience and knowledge in this sector. We can provide customised service to our clients,” said Kuroyanagi. “The lifespan of an LPG ship is well over 20 years. We are not aiming only for short-term returns.”
Kumiai Group has a fleet of 29 ships on the water, including 20 bulkers, seven gas carriers and one asphalt tanker.