Middle East shipping industry projected to grow 35 per cent

The Middle East shipping industry is projected to grow by 30 to 35 per cent this year, increasing its share of the global sea freight market, according to senior analysts and industry experts.

The high demand for oil worldwide, the increasing demand for commodities within the Middle East and the positioning of the region as a major logistics hub are helping the regional shipping industry to grow further. “Strong growth in trading activities backed by increasing demand for commodities is keeping the Middle East shipping industry afloat. But oil and gas shipments remain the key factors for strong growth in the region,” said Abdullah Al Shuraim, Chairman for Gulf Navigation Holding. Increased demand for energy from the expansionary BRIC economies (Brazil, Russia, India and China) is expected to drive the demand for crude oil upwards, despite deceleration in the growth of western economies. Current growth trends in global shipping are being attributed to increased shipment of goods from China, but are being also boosted by massive demand for materials and supplies needed to sustain the growth in the Middle and the Far East. The International Energy Agency (IEA) has estimated a 1.5 per cent year-on-year increase in world energy consumption in 2007 forecasting an increase of 2.4 per cent in 2008. Accordingly, the worldwide oil consumption is expected to increase from 85.9 million barrels per day in 2007 to 87.9m bbls per day in 2008. The world demand is set to grow to 118m bbls per day by 2030 as a result of population increase and rise in development activities. The growth in demand will continue to require transportation of oil and redistribution of shipping movements to cater to the rising consumption. To increase profit margin, European shipping firms are taking tentative steps towards consolidation. Maersk Line, the industry leader, plans to begin sharing vessels with competitors on some transpacific routes, as part of a broad cost-cutting programme. Singapore’s Neptune Orient Lines has is eyeing a tie-up with TUI of Germany.   

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Inpex ‘to hand LNG plant to Darwin’

Inpex Holdings, Japan’s biggest oil and gas explorer, is expected to confirm this month that it will build a A$12 billion (US$10.7 billion) liquefied natural gas plant in the northern Australian city of Darwin, Australian media reported today.

Inpex was initially considering building the plant, which will serve as an export hub for gas from its Ichthys field on the Browse basin off western Australia, either in Darwin or in Western Australia’s Kimberley region. The Australian newspaper said Darwin is expected to be chosen because a quick decision from the Western Australia state government on the Kimberley option is unlikely, citing unnamed industry sources and analysts. Inpex has a 76% stake in the Ichthys project, while Total owns the rest, Reuters reported.

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Taiwan’s Evergreen shelves Chinese shipyard plans

Taiwan’s Evergreen Group has recently said it has shelved plans to invest in a Chinese shipyard due to weak market conditions.  

With the change of the market, current timing is not good to diversity into shipbuilding industry, the company said in a written reply to Reuters’ questions. Evergreen had intended to form a shipbuilding joint venture in the southern Chinese port city of Quanzhou with the local government. The planned shipyard would have had the capacity to make ships of 350,000 tonnes and would have been ready to start production in 2011.

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