NYK Concludes Long-term Charter Contract for Tokyo Gas LNG Transportation
February 28, 2014
Image of LNG carrier to be built
On February 28, NYK and Tokyo LNG Tanker Co. Ltd.,1 a wholly owned subsidiary of Tokyo Gas Co. Ltd., agreed to a 20-year contract for the charter and joint ownership of a new liquefied natural gas (LNG) carrier. NYK also concluded a contract with Japan Marine United Corporation (JMU) for construction of the LNG carrier, which will have a cargo tank capacity of 165,000 cubic meters.
At present, NYK and Tokyo LNG Tanker jointly own two LNG carriers. The newly built vessel will be the third operated under joint ownership by the two companies. Upon completion of shipbuilding in 2017, the ship will be mainly used for LNG transportation from the Cove Point LNG project in the United States.
The new LNG carrier will employ the self-supporting prismatic-shaped IMO type-B (SPB) design developed by the IHI Corporation and JMU. The SPB design features a precise analysis of structural strength and fatigue integrity, together with a quality-control process that ensures complete machining accuracy and welding and thus results in a very safe vessel having an extremely high structural reliability. Moreover, the carrier will have a structural advantage in that most of the tank will be fitted inside the hull, allowing favorable front views from the vessel’s bridge as well as reduced wind resistance.
In addition, to comply with environmental regulations for vessel operations along the U.S. coast2 the new LNG carrier will be equipped with a tri-fuel diesel electric propulsion system3 that can use low-sulfur fuel oil, in addition to a selective catalytic reduction (SCR) system.4 Moreover, insulating materials will be installed in the carrier to suppress the boil-off rate5 in the cargo tank to 0.08 percent of tank volume per day, the world’s lowest level. The new carrier will have superior fuel-efficiency and mitigate environmental burdens.
NYK will continue to meet the world’s growing demand for LNG by providing stable and efficient LNG transportation.
<Outline of Contract>
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Vessel
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New SPB-design LNG carrier having 165,000 m3 capacity (shipbuilding completion scheduled for 2017)
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Ownership
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Tokyo LNG Tanker (70%); NYK (30%)
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Shipbuilder
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Japan Marine United Corporation
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Term of charter
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20 years from the launch of the new LNG carrier
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Ship-management
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NYK
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1 Tokyo LNG Tanker Co. Ltd.
Tokyo LNG Tanker was established in 1991 as a wholly owned subsidiary of Tokyo Gas Co. Ltd. to engage in LNG transportation services for Tokyo Gas. Tokyo LNG Tanker’s business includes vessel ownership and leasing, in addition to LNG and LPG transportation. The company has a total capital of 1.2 billion yen and currently manages and owns 10 vessels (two additional vessels are currently being built).
2 Regulations restrict SOx emissions discharged from vessels that navigate within 200 nautical miles of the U.S. coastline.
3 A system to generate electric power from a diesel engine fueled with low-sulfur oil (light oil), heavy oil, or gas. Propulsion is conveyed to the propellers by an electric motor.
4 Selective catalytic reduction system
A post-processing equipment system that breaks down emitted NOx into nitrogen and water using an ammonia source (reducing agent)
5 Percentage of gas volume that vaporizes during navigation
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