Shipping Operations Strategy Essay Example | Topics and Well Written Essays - 3750 words

Shipping Operations Strategy - Essay Example The growth in the LNG trade is expected to continue for some time. This, as a number of new sources is being exploited, or is in the process of being exploited. This has resulted in an increase in the demand for LNG carriers and an increase in activities in various ship yards around the world. While research suggests an increase in business for firms in the supply chain, there are a number of ships that were idle throughout 2008 to 2010. This has been so, even with the substantial increase in importation in Japan, Korea and Spain. However, while their imports are increasing, those of North America and Europe have not shown any significant changes. LNG is required for heating and cooking purposes. In some countries it is used to generate electricity. It is also said to emit less carbon dioxide than other fossil fuel such as coal and oil. This makes it a popular commodity in most countries. According to Jensen (2004, p5) prior to the development of liquefied natural gas (LNG) technolog y, its use was limited to areas that could be served by pipelines. However, the development of LNG along with improvements in technology and cost has changed all of that and so gas is rapidly becoming an internationally traded commodity. LNG is condensed natural gas. The volume of which has been reduced by a factor of 600 for storage and transportation (Audun Brands?ter 2010). It is transported by LNG carriers that are capable of safely transporting LNG from liquefaction plants to LNG terminals for storage and re-gasification. Some carriers are specially equipped to allow for the capability of re-gasification on board the vessel. Introduction A number of factors have to be considered in making the decision of whether to buy 6 LNG Tankers. These are technical as well as commercial considerations, which demand an understanding of the product and the market. LNG Carriers form the link between the liquefaction plan and the LNG terminal and so it forms an important part of the supply cha in (GIIGNL Technical Study Group n.d.). Supplies of LNG are imported primarily from countries such as Algeria, Trinidad, Venezuela, Nigeria, Norway, Qatar, Oman and Australia. These represent areas where large discoveries have been made. Some LNG is also produced in Alaska. LNG is a viable export commodity for these countries because they cannot use all the natural gas that they produce. (DOM n.d.) Liquefied natural gas (LNG) is natural gas which has been converted to liquid to facilitate its storage and transportation. According to MAGALOG (2008) LNG is a space efficient way to store and transport natural gas when pipelines are not a feasible solution. This conversion is, however, of a temporary nature and involves a number of processes. After the gas is extracted, it is taken to a plant for processing, where it is purified by removing water, oil, mud and gases including CO2 and H2S, thereby allowing for its condensation. The gas is condensed into a liquid at close to atmospheric p ressure by cooling it to approximately -162oC (-260oF). The LNG is then stored into tanks, after which, it is loaded onto ships. LNG consists mainly of