Endesa poised to start search for second LNG ship

Spanish utility Endesa is expected to approach the market in the coming weeks for a second LNG carrier to take on term charter.

Industry sources say the company is currently considering options for charter lengths of three, five or seven years.

The sources add that the requirement, even for a lone vessel, stands out in a market where there is little fresh newbuilding business.

Madrid-based Endesa, which is owned by Italian energy company Enel, went to the market in mid-2016 for up to three LNG carrier newbuildings.

Shipowners were given a range of charter options on which to make offers, including long and short-term charters for newbuildings and existing ships, and contracts of affreightment.

But after delaying the bid process, the company dashed the hopes of owners hungry for new business by scaling back its requirements to just one vessel.

Around a year later, it emerged that Knutsen OAS Shipping had been selected to provide a vessel.

The Norwegian owner contracted a 180,000-cbm LNG carrier at Hyundai Heavy Industries (HHI) against the business. The M-type, electronically controlled, gas-injection vessel is due for delivery in 2020.

LNG shipping players say Knutsen is sitting on an option for another vessel at HHI and is likely to be a hot contender for any new business.

In addition, some industry players say BW LNG could be in the mix. The outfit has LNG carrier tonnage on order in South Korea and is said to have come a close second on the 2016 tender.

Endesa needs LNG carriers to cover its US liftings. It is buying 2.25 million tonnes per annum of the commodity on a free on board basis over a 20-year period from US producer Cheniere Energy’s Corpus Christi LNG project in Texas.

Endesa also holds interests in a company developing two LNG reception, storage and regasification plants in the Canary Islands.