Qatar's Nakilat may expand its LPG fleet

Qatar Gas Transport Co (Nakilat) may expand its fleet of liquefied petroleum gas (LPG) ships as it increases transportation of the product, its managing director said.

"Quite a bit of the LPG we are now selling on an FOB (free on board) basis, where (customers) buy it and provide the transportation themselves," Nakilat's Managing Director Muhammad Ghannam told Reuters in an interview.

"In future we might try to change the arrangement to providing transport of LPG, which means we would increase our fleet eventually," he said in an interview.

"We are getting a good price now when we sell LPG on an FOB basis to buyers who have the shipping capacity."

The company, which currently has four LPG vessels in addition to its 54 liquefied natural gas (LNG) tankers, ships Qatar's liquefied natural gas (LNG) to overseas markets. It is the world's largest shipper of LNG.

As Qatar reaches its goal of being able to export 77 million tonnes of LNG this year, it may look to increase its production of associated products, including LPG and sulfur.

Therefore Nakilat may also widen the offering of products it ships, Ghannam said.

"Our mandate is to do everything we can, as long as it makes economic sense and gives us good return for our investors. We would look at transporting anything Qatar can produce," he said.

Strategic decisions taken by the Gulf state, such as extending the moratorium on further development of its North Field, currently in place until 2014, would not heavily affect the company, he said.

"We are linked very closely to the LNG business in Qatar. If they decide to lift the moratorium, our LNG business, as well as LPG, sulfur and all the byproducts would of course increase. But we are quite dependent as it is on (Qatari LNG producers) Qatargas and Rasgas."

Nakilat carries LNG to countries as far afield as China, Spain and the United States.

It began a $6.8 billion financing programme in 2006 to fund construction of 25 LNG ships at South Korean shipyards.

The company completed the fleet of 54 owned and part-owned special LNG carrier vessels earlier this year, giving it more than 16 percent of the world's LNG shipping fleet.

It expects to account for over 30 per cent of global LNG supply by 2011.

The source of the gas is the North Field, which contains 15 per cent of proven world gas reserves. Qatar has the world's third-largest gas reserves behind Russia and Iran.

Nakilat, Arabic for "the carriers," has invested close to $11bn in developing its fleet, Ghannam said, adding that he believed eastern markets were offering the most opportunity for Qatar.

"China, India, Japan, Korea even, Thailand, Taiwan: all of these places in the Far East are really the markets for us. That's what they are really targeting. What in the past was targeted to the US market has been diverted to the east."

"We get a better price, and it's closer."