CNG Ocean Transport

As the CNG ocean transport industry enters the final stretch toward commercialization, major classification society approval processes (ABS, DNV and Lloyds) appear to be gaining momentum, and strategic alliances and partnerships are being established to create not only critical mass, but also, sustainable competitive advantages in a burgeoning industry.

Leading technology developers include TransCanada, in partnership with Overseas Shipholding Group (OSG), Sea NG, EnerSea and Knutsen. However, as serious interest in regional applications plays harbinger to first ship orders, and pilot-project developments take big steps forward, other well-heeled competitors can be expected to enter the field with a strong commitment to capturing share.

Driven largely by record-high petroleum prices and increases in gas prices, CNG appears to offer producer netbacks superior to those of LNG alternatives at distances of less than 1,500 nautical miles. Furthermore, in the currently tight construction market, CNG offers the comparative supply-chain advantages of considerably less infrastructure associated with loading and unloading facilities. Also, reduced upstream infrastructure CAPEX means less exposure to stranded capital. While questions still remain as to the risks (compared with LNG), CNG technology developers are having little difficulty attracting serious investors.

Zeus has, probably more so than in any other area, cultivated its reputation as a best-in-class boutique for the emerging CNG industry over the past several years. In 2002, and again in 2004, Zeus published what are commonly regarded as the world’s most definitive works on CNG ocean transport. More recently, Zeus has been involved in work aimed at developing and implementing major CNG projects.

Our full suite of capabilities includes development advisory services, program management services and operations advisory services. Development advisory services include gas supply acquisition and negotiation support, transportation services, market assessment, benchmarking, feasibility analysis, project configuration, business plan development, project financing, due-diligence and documentation support.

ZECG’s program management expertise encompasses all developmental steps leading to commercial operation. This includes contract negotiations, selection of process licensors, conceptual CNG terminal design, cost estimating and high level scheduling. ZECG is versed in establishing and managing the bidding processes for pre-FEED, FEED and lump-sum turnkey EPCC contracts and overseeing consulting, engineering, procurement and construction tasks from the feasibility and environmental assessment stages onward, through start-up and into commercial operation. ZECG will, insofar as possible, ensure that the consultants and contractors deliver each phase of a project on time, within budget and in accordance with appropriate specifications.

Operations advisory services might include best practices, gas systems management advisory services, supply logistics and planning, storage management and practices, marketing strategy, strategic planning, contracts administration and management auditing.

Industry Insight: CNG