NEWS ANALYSIS


Korean consortium eyes GTT T


he sale of French liquefied natural gas (LNG) containment company GTT (formerly Gaztransport & Technigaz) has sparked interest


from a number of industry players with South Korean shipbuilders leading the pack, writes Julian Macqueen. GTT’s monopoly position in the market for


membrane containment systems for LNG carriers makes it an attractive proposition. Te French equipment maker is expected to carry a


price tag of US$1bn to US$1.5bn, according to its CEO and president Philippe Berterottierre. “The buyer will have a 95% market share just


by buying GTT,” the chief executive told The Naval Architect. By his reckoning, four major yards – Daewoo


Shipbuilding and Marine Engineering (DSME), Samsung Heavy Industries (SHI), Hyundai Heavy and STX along with Korean gas major Kogas – are interested in buying the company. Meanwhile, the Financial Times has reported of a


possible joint bid by Hyundai Heavy, DSME and SHI which could also include steelmaker Posco. While it is redolent on the boss to talk up the firm,


GTT’s premier position in containment systems for LNG ships is not in doubt. LNG shipowners have had two systems to choose


from: the moss spherical system and the GTT membrane containment system. Given that the membrane system is the cheaper of the two, its rise to pre-eminence at a time when the LNG market has been able to attract significant investment was assured. But that prime position could be up for grabs as other


systems, not least from one of GTT’s main customers, SHI, come on to the market in the next couple of years. Certainly, SHI’s smart containment system advanced has ruffled feathers in the GTT boardroom. But SHI is hardly alone. Braemar Seascope has announced a new, flat


plate technology system that it is to develop with US shipbuilder General Dynamics NASSCO. “Te system is built off hull and allows significant


reductions in LNG carrier build time,” the company says. Buying GTT would make sense for the users of


its technology since installing its membrane system on licence is said to cost between US$5 million to US$7 million per vessel. Losing that cost would boost competitiveness. Whether GTT’s existing licensing deals would


complicate a potential sale is a moot point. One ship financier, who preferred to remain anonymous, suggested as a caveat that the company’s existing licensing deals should be closely read by any potential buyer.


12 On the global stage, controlling LNG shipping’s


containment system of choice would help the South Koreans beat off Chinese competition by cementing their position at the top end of the global shipbuilding market. However, although GTT’s dominant market position


has added to its allure, its membrane containment system has not been without technical hitches. Ships fitted with membrane systems experienced


de-bonding problems, in which membrane layers came unstuck. Tese appeared in the Mark III system soon aſter the delivery of BG Group’s 2004, SHI-built, 138,200m3


Methane Kari Elin. Since then, similar concerns have arisen on


some 20 vessels. Te downside for shipowners has been the time spent in dry dock to fix the problem. The 2008-built, BP-controlled, 155,000m3


British


Diamond LNG carrier, for example, undertook a four-month repair job on its Mark III membrane- type containment system. GTT, class, shipowners and SHI have worked


hard to get to the root of the bonding problems. It seems that these relate to a combination of factors the importance of which were perhaps not well understood when the systems were first installed. New glues, installation procedures and tests have been introduced to ensure the integrity of the secondary barrier. De-bonding is thought to be a potential hiccup


for LNG vessels built between 1997 and 2007. Since then, a different method, called hot-pad curing, has been introduced. Latest developments in the field include a new


company, Cryovision, and its Termal Assessment of Membrane Integrity (TAMI) procedure. According to GTT, this is “an innovative and cost-effective method of assessing the condition of the membrane system during operation, thereby avoiding costly testing during dry-docking”. It would seem, then, that such problems are closer


to the file marked ‘teething problems’ than a reflection of anything more fundamental. Unlike other shipping sectors, LNG is positively


perky. In February, SHI landed an order with Golar LNG for two LNG vessels while STX nabbed a two-ship order with Russia’s Sovcomflot for delivery in 2015 in the same month. With that kind of market movement, and the


optimism about future opportunities that it implies, there is much to play for. GTT is currently owned by GDF Suez (40%), Total (30%) and Hellman & Friedman (30%). NA


The Naval Architect March 2012


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