Outlook Overview LPG Exports LPG Imports Fleet supply Ton-mile Freight rates Order book stands at Ton-mile demand is At current fleet supply A new wave of PDH Exports via VLGC from 14% of the total fleet. expected to increase level, VLGC rate is plants come onstream in North America is driven by sustained estimated to gradually China and South Korea estimated to continue 85% of the newbuild export growth from the recover. in 2019. growing. orders are backed by U.S. traders/TCs. However, seasonality, Retail demand from Middle East growth rate But increasing newbuild change of behaviors and emerging markets in slows down due to activities could offset the technology would make Asia such as India, Iranian sanctions and growing ton-mile the freight market less Indonesia remain strong. OPEC cuts. demand. optimistic. 2
VLGC freight market in last 3 years FREIGHT RATES $70,000 Cash breakeven TCE $60,000 $50,000 For the past 3 years, TCE has been mostly under industry cash breakeven $40,000 levels at ~$25,000/day $30,000 $20,000 $10,000 Jan 2019 avg.TCE = $15,000/day - Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Source: Clarksons Historical, BW Analysis 3
LPG exports LPG EXPORTS Key Export Regions – Yearly Forecast Key Export Regions – Yearly Market Share Forecast North Americas Middle East North Americas Middle East Others 40 100% North America is estimated to 22% 23% 24% 29% 28% become the largest exporting region 33% 34% 35% 80% 30 Million tons North America exports continue 60% 38% 40% 41% to grow, Middle East stabilises 40% 20 43% 43% 46% 40% 51% 10 20% 40% 38% 35% 32% 28% 24% 19% 15% - 0% 2013 2014 2015 2016 2017 2018 2019F 2020F 2013 2014 2015 2016 2017 2018 2019F 2020F Source: IHS Waterborne, NGL Strategy Research 4
LPG imports LPG IMPORTS 2016 2017 2018 20 18 16 14 Stable 12 Million tons 10 17.4 16.5 Stable 8 15.2 12.5 6 12.2 12.0 11.2 10.9 10.7 10.4 10.2 9.8 8.2 4 7.5 7.3 7.4 6.8 6.2 2 - China Japan India Southeast Asia South Korea Europe Source: IHS Waterborne 5
Narrowing arbitrage from US to FE FREIGHT RATES $800 $350 Implied Arbitrage (RHS) FE Propane price US Propane price $300 $700 $250 $600 $200 $500 $150 US$/ton US$/ton $400 $100 $300 $50 $200 - $100 ($50) Implied Arbitrage = FE propane CFR price (M+1) – Mount Belvieu FOB price – Terminal costs - ($100) Source: Argus, BW Analysis 6 Note: 2015 terminal cost is assumed based on average terminal cost in 2016, 2017 and 2018
VLGC fleet development FLEET SUPPLY 50 350 Recycling Potential Recycled 293 292 300 To be delivered Delivered 277 40 265 260 Total numebr of VLGC by year-end (RHS) 250 227 30 200 179 14% of 152 46 orderbook 142 140 140 137 137 20 150 129 35 102 100 98 26 25 100 10 19 18 13 11 11 50 10 9 8 6 3 2 2 1 - -1 0 -2 -2 -2 -3 -4 -4 -5 -6 -6 -6 -7 (10) -50 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Fleet size has almost doubled in 6 years from 2014 to 2019 Source: Clarksons Historical, BW Analysis 7
VLGC asset price FLEET SUPPLY Newbuild VLGC delivered price Avg. Stock Market Price in NBE 5-year old NBE price $100 $95 $90 $85 $80 Million US$ $75 $73 $70 $65 $65 $60 $55 $50 $47 $45 $40 Source: Clarksons Historical, BW Analysis 8
Technology Entry Behaviors Disruptions & Innovation Barriers in shipping Increase efficiency Lower barrier Charterers increase and transparency to entry their controls of ships 9
Technology giants are eyeing at shipping industry Technology Increased + efficiency and Pressures on Tech giants with transparency in margin high capitals shipping 10
How BW LPG “Think Different” LPG Propulsion Fuel for the future Smart Ship Innovating for the future Product Services Fully integrated product delivery 11
BW LPG is charting a sustainable future through LPG propulsion Deck tanks No deviation Round voyage Clean Fuel flexibility Green Efficient Approved Economical Flexible 12
Cost Efficient Today & Tomorrow Houston - Chiba - Ningbo - Houston via Panama Canal Fuel cost USD 6,600 USD/day USD 6,200 25,000 per day savings per day savings 20,000 15,000 10,000 LPG HFO Compliant Fuel LPG HFO Compliant LPG HFO Compliant 5,000 Fuel Fuel - 2019 YTFeb 2020E Assumptions Fuel prices Distance: 20,534 nm USD/mt 2019 YTFeb 2020E Speed: 16 knots, 5% sea margin LPG 370 350 ULSHFO 480 450 Carrying capacity 49.370 mt HFO 400 310 LPG available for fuel or sales 2.770 mt LPG fuel autonomy @ 36.5 tons per day 76 days Calculation includes Pilot Fuel consumption - Houston - Chiba - Ningbo - Houston (via Panama Canal) 57 days Safety range 19 days Source: Argus, TFS 12/2/2019 Fully ref Propane @ sg of 0.58 13
Embracing Innovation with Smart Ships in Action Aimed at turning ships into digital enterprises, the smart ship project connects and controls the entire ecosystem within the vessel and transmits data to a digital cloud for remote monitoring and greater business value. Key Advantages Improved furl consumption Enhanced operation efficiency Increased compliance Improved crew safety Reduced risk of collisions Lower manpower needs Lower OPEX expenses Reduced injury & cargo loss claims Reduced human error with greater automation 14
Commercial Services At a Glance Assets Approx. USD 2 Billion invested in VLGC’s Dedicated team Fleet bringing together 49 vessels, average age of owned VLGCs at 7 years (Global average age 9 years) over 100 years of History market experience Entered the gas transportation business in 1978 and have grown from 6 to 47 VLGCs Chartering 24/7 Customer services Flexible Chartering Solutions CoA / Time Charter, SPOT, Storage / STS Projects Sale and purchase, newbuilding, adjacent segments 15
Assets Approx. USD 2 Billion invested Product Services Team in VLGC’s Experience Transported over 13 Million tons of LPG in 2018 A team of 5 dedicated Systems professionals with over 60 years State of the art systems to support cargo of LPG and trading experience delivery in blue chip organizations Service A low-risk and fully-integrated product delivery service to customers Trade Finance Support from BNP Paribas 16
Enhancing Our Value Proposition Projects Providing integrated product and shipping solutions Sale and Chartering OSLO Purchase Chartering Technical & Operations HOUSTON Technical & Operations SINGAPORE Technical Chartering Product Services Product Projects Technical & Operations Services Operations Contact Us Product Services : productservices@bwlpg.com Chartering : chartering@bwlpg.com Projects : projects@bwlpg.com Fleet Technical : fleettech@bwlpg.com Operations : fleetops@bwlpg.com 17
For more information please visit our official website for BW LPG business news, financial results, presentations, company reports and the latest share price. https://www.bwlpg.com/investor-centre THANK YOU 18
Recommend
More recommend
