BIMCO is developing a new contract for the transportation of LNG under voyage charter terms, as the amount of LNG traded on the sport market continues to grow.
The new charter will add additional flexibility to the spot market and give parties alternative means to manage their risks and control costs.
LNG cargo issues
Due to the nature of LNG cargo and its common use as propulsive fuel, it creates a number of challenges when carried under conventional voyage charter party terms. Some of the key issues that are addressed include the use of cargo as fuel; heel; boil-off gas (BOG); and how to deal with delays.
The main issues stem from the fact that the LNG cargo continuously boils-off, and that time is crucial, in the sense that arrival at loading and discharging berths has to run smoothly, due to the infrastructure of the LNG business.
This has called for a balancing act in an attempt to find solutions that are acceptable to both owners and charterers under voyage terms. For example, a ship can use the natural BOG as fuel free of charge during the voyage up to a certain limit. If there are delays during the sea voyage so that the cap is exceeded, the loss of LNG has to be allocated between the parties.
Under BIMCO’s LNGVOY charter, owners will take this risk, unless the delay is caused by the charterers or by an event outside the owners’ control, such as a blocked or restricted channel or seizure by piracy or war risks. On the other hand, at loading and discharging ports, additional loss of cargo will be for charterers’ account, except when caused by owners' breach or by an expected laytime delay.
BIMCO added that adoption of the new contract is aimed for 2015.
Adapted from press release by Katie Woodward
Read the article online at: https://www.lngindustry.com/lng-shipping/20022015/bimco-charter-to-increase-lng-flexibility-285/