Australian compressed natural gas (CNG) company Global Energy Ventures (GEV) has signed a letter of intent with Chinese shipyard CIMC Raffles for the construction of up to eight CNG carriers.
The LOI is based on a firm order for four 200 mmscf CNG carriers and options to build additional four.
GEV’s CNG Optimum 200 ship design has received approval by the American Bureau of Shipping (ABS).
“Executing our first LOI with a respected shipyard to deliver our first CNG Optimum contract is indeed a key milestone for GEV representing a major de-risking event,” said Jens Martin Jensen, a non-executive director of GEV.
“Together with our advisors Clarksons and SeaQuest, we continue to focus on our preferred shipyards to refine their technical specification and capital cost improvements, and work towards a final draft contract,” Jensen added.
Under the proposed shipbuilding contract, the first ship will be delivered on a 30-month construction schedule, then every four months for the following three ships.
The major terms of a shipbuilding contract, including final contract price, payment terms, scope of supply, and delivery date, are subject to further discussion and agreement by both parties.
According to Maurice Brand, CEO of GEV, the company will now accelerate its regional gas supply agreements that are being progressed across multiple regions.
“Our target projects are either seeking to commercialise stranded gas assets, commercialise associated gas production, or provide a transport solution to high growth markets with bankable long-term offtake customers in place. Our ship capital cost for the 200MMscf is transformational for CNG to become a viable alternative to FLNG or sub-sea pipelines,” said Brand.
GEV states on its website its goal is to become a world leader in the shipping of CNG.
Among well known names associated with the venture, Jens Martin Jensen, formerly John Fredriksen’s right hand man, is listed as a boardmember.