Annual Report 2012


>> P.25

TOPICSOVERVIEWOFFISCAL2011INLIQUEFIEDNATURALGAS(LNG)ANDLIQUEFIEDPETROLEUMGAS(LPG)CARRIERSERVICES,BUSINESSFORVESSELSUNDERLONG-TERMCONTRACTCONTINUEDTODEVELOPFAVORABLY,ANDTHE“K”LINEGROUP’SCARRIERSINSPOTSERVICEOPERATEDSTABLYUNDERTIME-CHARTERCONTRACTS.INTHERESULTSFOROILTANKERSERVICES,WHILEVLCC(LARGECRUDETANKERS)BUSINESSUNDERLONG-TERMCONTRACTDEVELOPEDSTEADILY,MARKETCONDITIONSFORMEDIUM-SIZEDCRUDEOILCARRIERSANDOILPRODUCTCARRIERSWERELESSFAVORABLETHANEXPECTED,ANDWESTROVETOIMPROVEPROfiTABILITYTHROUGHflEETSIZEREDUCTIONBYSELLINGORRETURNINGCARRIERS.FISCAL2012BUSINESSOUTLOOKLNGCARRIERSERVICESDEMANDFORNATURALGASISEXPECTEDTOSTEADILYRISEASARESULTOFSTRONGGROWTHINENERGYDEMANDINEMERGINGCOUNTRIES,ANDINCREASINGAWARENESSOFENVIRONMENTALCONSERVATION.INTHISFAVORABLEBUSINESSENVIRONMENT,“K”LINEFORECASTSSTABLEOPERATIONOFALLLNGCARRIERS.INPARTICULAR,PROfiTIMPROVEMENTISEXPECTEDFROMSPOTCARRIERSSCHEDULEDTOSTARTOPERATINGUNDERFAVORABLENEWCONTRACTSSEQUENTIALLY.INTRANSPORTINGLNG,THEMOSTENVIRONMENT-FRIENDLYFOSSILFUEL,WEWILLSEEKTOACQUIRENEWBUSINESSOPPORTUNITIESTHROUGHEXPANDINGANDUPGRADINGOURflEETBYADDINGNEWBUILDINGSTOMEETTHEINCREASINGDEMAND,INADDITIONTOEXISTINGLONG-TERMCONTRACTS.OILTANKERSERVICESINTHEOUTLOOKFOROILTANKERSERVICES,DESPITESTRONGMOVEMENTSOFCRUDEOILANDOILPRODUCTS,WEEXPECTRECOVERYINMARKETCONDITIONSTOTAKESOMETIMESINCESUPPLYPRESSUREFROMNEWBUILDINGSREMAINSHIGH.THELPGCARRIERBUSINESSISEXPECTEDTODEVELOPFAVORABLYTHANKSTOSTRONGCARGOMOVEMENTSANDAFEWNEWBUILDINGSINORDERBOOKS.INADDITIONTOOILANDOILPRODUCTSTRANSPORT,THISYEAR“K”LINEWILLENTERTHECHEMICALTRANSPORTBUSINESS.THEfiRSTCHEMICALCARRIERWASDELIVEREDINMARCHOFTHISYEAR,ANDTWOMORECHEMICALCARRIERSARETOBEDELIVEREDIN2013ANDFULL-SCALEOPERATIONWILLSTARTWITHAflEETOFTHREECARRIERS.DEVELOPMENTOFENERGYTRANSPORTATIONSERVICESASFORDRILLSHIPBUSINESS,“K”LINE’SPARTICIPATINGOWNERSHIPCONSORTIUMTOOKDELIVERYOFTHEfiRSTDRILLSHIPATSAMSUNGHEAVYINDUSTRIESOFSOUTHKOREAINDECEMBER2011ANDOPERATIONSHAVESTARTEDINBRAZIL.THEVESSELISUNDERCHARTERTOBRAZIL’SSTATE-OWNEDPETROLEUMCOMPANYPETROBRASFORAMAXIMUMOF20YEARSANDISEXPECTEDTOEARNSTABLEPROfiTINTHELONGTERM.FLEXLNG,ACOMPANYINWHICH“K”LINEISTHELARGESTSHAREHOLDER,ISINVOLVEDINANUMBEROFDEVELOPINGPROJECTS.ONEEXAMPLEISTHEINTEROIL-CONTROLLEDPAPUANEWGUINEAPROJECTWHICHISWORKINGTOLIQUEFYNATURALGASFROMGASFIELDSBYUSINGAFLOATINGLNGPRODUCER.DUETOITSCLEANNATURE,GLOBALDEMANDFORLNGISEXPECTEDGROW,AND“K”LINEWILLCONTINUETOSUPPORTTHEflOATINGLNGPRODUCERBUSINESSTOPROVIDEASOLUTIONFORDEVELOPINGSMALLANDMEDIUM-SIZEGASfiELDSREMOTEFROMCONSUMINGAREAS.CHANGEINTHENUMBEROFSHIPSINOPERATION(VESSELS)NUMBEROFSHIPSINOPERATION(ASOFMARCH31,2012)(VESSELS)LNGCARRIERS20OILTANKERS16PRODUCTTANKERS6LPGCARRIERS5TOTAL47STARTOFOPERATIONOFAMEGADEEP-WATERDRILLSHIPINBRAZILPETROBRAS’SPRE-SALTFIELDSDECEMBER2011MARKEDTHEDELIVERYOFETESCOTAKATSUGUJATSAMSUNGHEAVYINDUSTRIESINSOUTHKOREA.THEDRILLSHIPISEQUIPPEDWITHTHEMOSTADVANCEDDRILLINGCAPABILITYANDCANEXPLOREFIELDSATWATERDEPTHSDOWNTO10,000FEET(ABOUT3,000METERS)ANDDRILLDOWNTOADEPTHOF30,000FEET(9,000METERS)BELOWSEABED.THEVESSELISUNDERCHARTERTOBRAZIL’SSTATE-OWNEDPETROLUEMCOMPANYPETROBRASSINCEAPRIL2012.DRILLINGOPERATIONHASSTARTEDINTHEPRE-SALTfiELDLOCATED200KILOMETERSOFFTHECOASTOFRIODEJANEIROATAWATERDEPTHOF2,000METERS.ETESCOTAKATSUGUJ25ANNUALREPORT2012


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