China LNG

CLOSE-KNIT

SHIPPING FAMILY THE

Established in 2004, China LNG Shipping International Co Ltd (CLSICO) provides a substantial and highly efficient shipborne ‘pipeline’ delivering LNG to China in support of the country’s LNG industry. CLSICO’s tight-knit multinational team has made a name for itself in a strategically critical industry that prizes reliability and strict schedules. The company’s General Manager, Andrew Johnston, spoke with Richard Hagan about the company’s unique past, its ethos for reliability, and its exciting future.

CHINA LNG SHIPPING

Based in Hong Kong, China LNG Shipping International Co Ltd (CLSICO) was established in July 2004 as a joint ven ture between COSCO, China Merchants and BP Shipping. The group’s initial focus was delivering LNG to China’s first LNG import project at Guangdong: however over time it has expanded to now deliver to Fujian and Shanghai as well.

For its part, BP Shipping – which has a stake in the Guangdong LNG Company Ltd – provided professional consultation and sup port to the new company. It continued in this support role until

CLSICO had developed sufficient institutional depth of its own. Then, in terms of an agreement between itself and the company’s shareholders, in August 2013 BP Shipping sold its shares and exited the group

A major highlight for CLSICO, and one for which it is still wellknown in the region, is that it received the first LNG vessels that were ever built in China. The first of its fleet was delivered in 2008.

Today, CLSICO’s highly skilled team of 24 staff members operates and manages a fleet of six dedicated LNG carrier vessels on behalf of their owners and charterers.

CLSICO’s diverse mix of staff nationalities at its head office in Hong Kong is a point of pride, with people hailing from countries across the world including mainland China, Britain, Malaysia, Greece, India and Hong Kong. The company’s focus on LNG vessel management means that the staff are specialised in the many aspects of LNG operations and according to General Manager Andrew Johnston, this is a real advantage in such a competitive industry.

“Our priorities and values revolve around LNG, and we manage LNG ships to the highest international standards,” he noted.

Safety and reliability Mr Johnston emphasised the fact that of those values and standards, LNG vessel operations emphasise two values above all else: safety and reliability.

“Safety is our top priority, we can’t overstress that,” he said. “Everything we do is extremely safe; we’re cautious and we’re also constantly mindful of the environment; a simultaneous require ment from the terminals we visit, especially Australia which has very high requirements in particular, and likewise China, Malaysia and Indonesia.”

Reliability is a core consideration in the LNG shipping business because so many aspects of LNG operations rely on it.

“The main requirement our charterers look for is reliability of our ships,” Mr Johnston confirmed. “LNG shipping creates a pipeline of LNG on the water. The production terminal supplying that pipeline only has so much storage capacity in its tanks and it’s very expensive to shut down and restart the terminal later if the storage becomes full. So we have to be sure to offload the stored LNG from the producers regularly and on time. We are that pipeline so reliability is super-important and it’s a metric that we measure very closely.”

TMC COMPRESSORS

Thank you, China LNG Shipping, for a successful conversion and rebuilding of your compressed air systems on board your LNG fleet, in order to improve the compressors’ reliability and service life.

We appreciate the good collaboration and long-term partnership, andare honoured to be regarded as one of your most trusted and important vendors.

We look forward to continuing the cooperation in the future.

editorial mention

Expanding the fleet

CLSICO manages a fleet of six modern LNG vessels: the Dapeng Sun, Dapeng Moon, Dapeng Star, Min Rong, Min Lu and Shen Hai. All six are on 25-year charters.

In order to ensure the long-term sustainability of the business beyond that mark and to meet the growing international demand for its services, the company is in the midst of negotiations for a substantial fleet expansion. And while those discussions are at a sensitive stage and therefore still largely confidential, Mr Johnston was able to reveal that the expansion will involve new build vessels, all of which will feature the latest propulsion technologies available on the market.

In the meantime, CLSICO is preparing for this expansion firstly through its large onshore team and also through its seafarers “We took on 16 cadets this year and next year we’ll onboard another 20,” he confirmed.

The CLSICO fleet currently operates on a liner basis, with deliveries mainly going to the Guangdong LNG port in China. In mid-2022, the Dapeng Star marked a major milestone with the delivery of its 1,000th cargo to Guangdong – a sign that CLSICO’s operations are substantially fruitful.

“In 2021, we delivered 115 LNG cargoes,” Mr Johnston recalled. “That’s roughly 19 cargoes per ship. It worked out to 7.55 million tonnes of LNG in one year. We’re busy little boats!” he said.

This trajectory is likely to continue given the upward trend in LNG’s popularity, and especially given ongoing geopolitical stressors.

“We expect to see a nearly vertical climb in demand in the next few years,” he commented. “The demand is extremely high; we can’t get enough ships.”

Staffing through Covid

As per any other ship management firm, CLSICO’s seafarers were affected heavily by Covid and the subsequent border closures. While the majority of nations have now relaxed most or all of their Covid

restrictions, China has maintained a very strict regime of Covid regulations, forcing CLSICO and its staff to adapt.

“The pandemic is still heavily ongoing in China,” Mr Johnston lamented. “Our ships are manned by Chinese and European sea farers, so the fact that the West is reducing Covid restrictions and the different Covid protocols now between regions, has led to dif ficultimes with crew changes, particularly for our Chinese crew.”

Naturally, this has frequently led to longer than expected con tracts at sea for CLSICO’s seafarers as well as lengthy quarantine stays in between crew changes. But despite these challenges, the company’s teams have remained resilient and its seafarers – the most impacted of all – have been stoic.

“Our staff have all showed grace throughout the process,” said Mr Johnston. “They know they have to be flexible in scheduling. Our staffing department have been very creative and have found us ports where we can do crew changes. Malaysia in particular has been very helpful with opening borders to get people on and off. Since Covid has matured, we’ve got more windows of opportunity.”

CHINA LNG SHIPPING INTERNATIONAL I PROFILE

Sailing into the future

With growth plans in full swing, CLSICO is now focused on its own internal processes to ensure staffing and other infrastructure is ready to meet the new vessels when they arrive. And according to Mr Johnston, a big part of future-proofing CLSICO is about ensuring they find creative ways to retain its talented staff.

“These days it’s really important to give your staff satisfaction in both their work and their lifestyle. There are so many opportu nities out there, so we have to consider how we’ll deliver that at all times.”

Here, Mr Johnston revealed that CLSICO considers its planned fleet upgrade as a further positive part of its effort to retain staff, as it will cement the company’s long-term prospects and enhance the staff’s sense of job security.

In closing, he offered some insight into CLSICO’s corporate char acter and what it means for both him and the rest of the staff.

“This may sound clichéd and perhaps it is, but CLSICO is the best company I’ve ever worked for. There’s only 24 of us in the office, so we are a very close, very tight-knit group. We treat each other respectfully and politely. It’s a very nice atmosphere. What makes CLSICO special is that we know everybody – whether at sea or at the office – individually. You’re not just a number on a computer. It’s the CLSICO family.” n