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MISC Bhd will maintain its
capacity-led growth strategy in its targeted
energy logistics and transportation markets. The
group will be taking delivery of 23 ships with
combined 2.13 million dwt worth RM4.38 billion
over the next four years.
In the LNG sector, MISC will be taking delivery
of five LNG carriers by end of next year.
The national carrier which owns and operates a
total of 24 LNG ships continued to support
PETRONAS’ Global LNG business expansion
strategy.
The LNG shipping business has contributed some
21.5 per cent of the revenue totaling RM11.2
billion for the financial year ended 31st March
2007,” said the President/CEO of MISC Bhd, Datuk
Shamsul Azhar bin Abbas.
Datuk Shamsul said the demand outlook for LNG
shipping is expected to remain strong in the
coming years, as LNG trade is forecast to double
in 2015 supported by the increasing supply from
new LNG liquefaction plants in Oman, Australia,
Nigeria, Trinidad & Tobago, Qatar, Norway and
Russia; coupled with increasing demand for
cleaner fuels mainly from Europe, Japan, Korea,
China and India.
MISC has taken delivery of its 23rd LNG carrier,
Seri Angkasa in January 2007. Seri Angkasa was
delivered to MLNG to commence its twenty-year
time charter contract. MLNG also renewed its
charter contracts for Tenaga Tiga and Tenaga
Lima for fifteen years commencing May and July
2006 respectively. Similarly, charter contracts
for Aman Bintulu and Aman Hakata were also
extended to 2028.
The year under review also witnessed MISC's
first third party contract involving a new LNG
carrier, Seri Anggun which commenced medium term
employment with BG Group in November 2006.
Subsequently, BG Group awarded a similar
contract for another new LNG carrier of the same
class which will be delivered in December 2007.
In addition, MISC enhanced further its
relationship with Gaz de France (GdF) with an
extension of its charter party contract for
Tenaga Satu for another year starting April 2007
with option for two more years.
In the Petroleum shipping sector, the group will
be taking delivery of 10 new buildings (two VLLC
petroleum tankers and two Aframax tankers) by
2011.
Currently MISC operates a total of 65 petroleum
tankers (owned & in-chartered) with combined
capacity of eight million dwt.
Presenting sectoral review of MISC Bhd in the
2007 Annual Report, Datuk Shamsul said the
overall freight rates in the petroleum shipping
industry were under pressure due to slower
global oil demand growth especially from North
America and China. However, the weakening of oil
prices from previous highs assisted the demand
for oil to remain buoyant.
In view of that MISC has also established a
joint venture with Restis Group to co-own ten
new Aframax tankers contracted at Sungdong Yard
with deliveries between 2009 and 2011.
This venture will further enhance AET’s position
in the Aframax Europe market.
AET also contracted six Aframax tankers at
Tsuneishi shipyard with deliveries between 2009
and 2010. This will be part financed through
sale and lease-back arrangements for five of its
older Aframax tankers.
This arrangement will enable AET to continue
operating these tankers whilst re-investing the
capital released in newer tonnage.
AET also grew its Aframax fleet by in-chartering
four additional tankers thus enhancing its
Aframax critical mass to forty eight (thirty one
owned). During the year, AET took delivery of
two VLCCs, Bunga Kasturi Tiga and Bunga Kasturi
Empat bringing its VLCC fleet to ten tankers
(nine owned).
Leveraging on its existing strength of service
offerings, AET also expanded its presence in
product tanker services. Two MISC chemical
tankers which were subject to trading
restriction due to new IMO regulations were
converted into product tankers in December 2006.
With these two tankers, AET has a product tanker
fleet of ten.
Datuk Shamsul also said the outlook for chemical
shipping industry is encouraging with higher
demand for more sophisticated chemical tankers
and the development of petrochemical plants in
the Middle East.
In response to this positive outlook, MISC will
continue developing its presence in the niche
market segments of chemical and vegetable oil
transportation by building another eight more
ships with 304,000 dwt.
These deliveries is expected to raise the
contribution of MISC's chemical shipping
business from present 4.8 per cent share of
MISC's revenue and 3.8 per cent of its operating
profit in 2007.
The year 2006 witnessed firm freight rates for
the chemical shipping market. Demand for
chemical tankers increased on the back of
considerable growth of new petrochemical plant
capacity in the Middle East and heightened
petrochemical trading activities. On the supply
side, growth in chemical tanker tonnage was
balanced by new deliveries and the restriction
of lower specification tankers due to the
revised MARPOL Annex II Regulation.
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