IN PROFILE
Teekay on tankers Kenneth Hvid discusses the markets, pinning his hopes on the second half of the year
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eekay, one of the largest tanker operators in the world, is gearing up during the current market downturn to better position itself for the next tanker market upcycle. Kenneth Hvid, CEO of Teekay, admits the market faces several challenges in the first half of 2021 due to the ongoing impact of Covid-19 on oil demand and the continued efforts by the OPEC+ group of oil producers to limit supply in order to draw down global oil inventories and support oil prices. He expects the headwinds will continue to impact the tanker market in the near-term. “However, the longer-term outlook for the tanker market appears much brighter,” Hvid says, expecting oil demand to increase significantly during the the second half of the year in tandem with the rollout of mass vaccination programs across the globe while the supply side of the tanker fleet also continues to look very favourable. “More importantly for the tanker market, we expect average voyage distances to increase over the next decade as an increasing surplus of
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Teekay The consolidated Teekay entities manage and operate total assets under management of approximately $9bn, comprised of approximately 135 liquefied gas, offshore, and conventional tanker assets.
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crude oil in the Atlantic basin – for example, from the US and Brazil – is shipped to destinations in the AsiaPacific region where both end-user demand and refining capacity is rising,” he adds. According to Hvid, over the past year and half, Teekay has significantly deleveraged its balance sheet, creating a resilient financial position that provides significant financial flexibility, enabling the company to position itself for the next tanker market upcycle. The company has started a fleet optimisation programme which includes selling some older vessels and replacing them with more modern tonnage. On the LNG markets, Hvid reckons the LNG demand growth will continue during the next several decades as gas continues to displace coal and is a key component in the energy transition and more projects are coming to market that will require new LNG carriers on long-term contracts and he reveals that the company is looking to bid on a series of LNG carrier projects including Qatar’s LNG expansion project, which is expected to start production in 2025, as part of the next phase of growth and fleet modernisation. “The world is going through an energy transition, with renewables gaining an increasing share of the overall energy mix. However, we expect oil and gas will remain key to meeting the world’s energy needs for the foreseeable future,” Hvid says. Teekay is now making efforts on reducing the environmental footprint of its fleet. “Currently, we are focused on
preparing its fleet to comply with new IMO regulations coming into effect in 2023 which require a 20-30% improvement in vessel efficiency,” Hvid says, claiming that the company’s LNG carriers operate on LNG fuel produces approximately 20% fewer GHG emissions compared to conventional marine fuel, and its latest LNG carriers produce about 50% less CO2 per cu m of cargo delivered compared to older generations of LNG carriers. Looking ahead, Hvid says the company’s strategic planning is guided by the changes expected in the global energy mix as well as how the company can further reduce environmental footprint. “This is an interesting time for our world and with our nearly 50 years of company history, we want to be relevant industry players also for the next 50 years,” Hvid concludes. ● maritime ceo
