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Tanker |
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According to estimates, the consumption of petroleum as well as other liquid fuels may grow to 95 million barrels per day in 2015 and 118 million barrels per day in 2030. Much of the overall increase in consumption is projected for the non-OECD Asian countries like India and China, where strong economic growth is expected.
The production of crude oil has been concentrated mainly in the OPEC countries (more than 40%). Traditional consumers have been USA and Europe, with China and India emerging recently increasing imports to fuel their rapidly growing economies.
Simultaneously, world petroleum refining capacity has also increased to more than 82 million barrels per day, resulting in increased crude and petroleum product trade.
There has also been a large increase in the average voyage length of tankers. This is because countries like China and US are importing increasing quantities of oil from far off places. For example, nearly 1/4th of China’s oil imports come from West Africa, and its imports from Venezuela are on the rise. China’s oil imports have increased by 1.8 million barrels per day since 2003. Given the slow rate of supply vis a vis the increase in proportion of long haul crude, the tone-mile effect has grown even faster, by about 133%. Similarly, there has been a shift in oil import sources for the US. US oil imports from Venezuela and Mexico have decreased by half a million barrels per day, whereas imports from far off locations like West Africa and the Mediterranean are up by 700,000 barrels a day.
India’s rapidly growing economy depends on the consumption of energy sources of which oil is a major component. India’s consumption of crude oil exceeds 150 million tones. Due to lack of major domestic reserves, India is a net importer of crude oil and these imports account for nearly 3/4th of India’s total crude requirement and 1/4th of the total imports by value. India exports part of the petroleum products which are processed in local refineries.
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Mantrana Maritime Advisory provides
Market Analysis Tanker Shipping - Global
- Macro Analysis of Liquid Cargo Trade
- Global Demand Supply of Tankers
- New Tanker being Delivered
- Scrapping of Old Tankers
- Effect of Single Hull regulation
- Tankers Ordered / Building Berth
- Current Charter Rates in Tankers & Future Outlook in Tankers
Opportunities for Tanker operators in India
- Major Importers of Liquid Cargo in India
- Major Exporters of Liquid Cargo in India
- Tankers ordered by Indian Companies
- Sizes of ships ordered
- Brief Technical Specification
- Tentative price
- Profiling of New Entrant in Tanker Shipping Segment
- Profiling of Existing companies operating in Tanker Segment
- Expansion plan of existing segment
- Potential Market size for a new company in Shipping industry
Technical Advisory in Tanker Shipping
- Technical & Regulatory requirement in Tanker Shipping Segment
- Specification of Tanker
- Operation & maintenance
- Ships Classification & Registration
- Government Regulation
- MMD, DG Shipping registration
- Certification
Competition Assessment in Tanker Shipping
- Current players in the Tanker shipping industry
- India
- Major Players Globally
- Competition analysis of the current fleet available in India in terms of their technical capabilities
Entry Strategy in Tanker Shipping Sector
- Assessment of risk associated in Tanker Shipping
- Size and Number of Tankers to be acquired
- Suggest companies which could import Crude Oil/export petroleum products
- Introduce to Ship Brokers for Good Deal in Tanker acquisition
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Tanker Fleet Overview |
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The world tanker fleet has grown over past decade, in view of increase in global oil trade. The world tanker fleet comprises of more than 11,000 vessels amounting to more than 440 million DWT. Crude oil is the single largest commodity to be carried in tankers. The crude oil tanker fleet is relatively young compared to other types, with more than half the fleet younger than 10 years. Compared to this, the chemical tanker fleet is older with almost 1/3rd of the fleet older than 20 years. |
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In terms of vessel size, the tanker fleet has grown to an average size of around 40,000 DWT. Also, the average size of the vessels on order book is more than 60,000 DWT. Clearly, the shift is towards larger size vessels to take advantage of the economies of scale. Nearly 35% of the world fleet by volume comprises of VLCC (Very Large Crude Carrier) tankers.
The Indian coastal fleet comprises of 12 product carriers and 2 crude oil tankers, amounting to a total of about 150,000 DWT. The average age of this fleet is more than 25 years.
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Tanker Order Book Overview |
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Demand for conventional oil tankers depends on several factors, including:
World oil demand and supply: This affects the amount of crude oil and refined products transported in tankers
The relative locations of oil production, refining and consumption: These affect the distances over which the oil or refined products are transported and hence, the supply of tankers.
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In terms of order book all segments of the tanker fleet have seen an increase. However, the fastest growth has been in the LNG tanker market, as a result of increased global LNG consumption.
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The total order book stood at more than 2900 vessels amounting to more than 64 million DWT. Majority of these tankers were placed in the order books of Korea, Japan and China. Japan has received nearly 3/4th of the sophisticated liquid gas carrier orders. Nearly 41 million tankers are due for delivery in the years 2009 and 2010.
In the case of Indian shipyards, the orders have been received mainly due to lack of capacity in global yards. Around 15 tankers are on the order book of Indian yards, with nearly all of them chemical cum oil tankers amounting to more than 200 thousand DWT. |
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Future Outlook |
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However, this may not be applicable to VLCC tankers which are unique due to their size and ply on special routes. Also, VLCCs are quite well equipped and even single hull VLCC might be allowed to ply. This segment is the only one in tankers which has not shown signs of recovery.
Oil prices which had fallen to $40 per barrel have now crossed $70 as barrel and are expected to stabilize in the next few years or even increase. A substantial portion of the current tanker fleet is aging and will need to be replaced. India’s oil consumption and refining capacity is expected to increase and the ageing Indian tanker fleet, especially in the coastal segment will need replacement. This presents an opportunity, not only for Indian shipbuilders but also for India’s thriving ship demolition industry.
In the long term, the tanker fleet is expected to expand both in number and average size. With increasing number of ports able to handle large ships, it will become possible to take advantage of the economies of scale.
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Single Hull Tanker Phase Out |
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As per IMO regulations, all the tankers with a single hull are to be phased out by 2010. After 2010, only double hull tankers will be allowed to ply along with single hull tankers below the age of 25, who have the requisite permissions from their flag states and port states.
The accelerated phase out the single hull tankers under revised regulation 13G of Annex 1 of MARPOL, the final phasing out of pre MARPOL tankers was shifted from 2007 to 2005. The phasing out of MARPOL tankers and also smaller tankers was also brought forward to 2010 from 2015. Under the revised regulation the Condition Assessment Scheme (CAS) would be applicable to all single hull tankers aged 15 yrs or more.
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The total number of tankers likely to be demolished by 2010 are 425. However, of these 273 may escape demolition if they acquire the necessary permission from the flag and port states. In case all 425 are scrapped during the year 2010, we will see a monthly demolition of 4 million DWT.
Currently, there are 15 tankers on Indian orderbook, 14 of which are Chemical & Oil carriers and 1 is a 3000 DWT product carrier. The largest tanker being built is of 20,000 DWT. This will result in increase in demand of tankers and will give a boost to the tanker building segment. The excess supply build up, which we saw in bulker segment, will not take place in tankers. Apart from the phase out, the current downturn will also contribute to a future shortage. With no let up in E&P (oil) activities, there will be a demand for tankers in the next 10 years, but there will be very little supply! Hence, in the medium term, the tanker segment is your best bet to invest.
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