Asia/Pacific News
Room for "Cautious Optimism" in Singapore Maritime Industry
Keppel Offshore & Marine (Keppel)'s Managing Director, Michael Chia, Wednesday was said to be cautiously optimistic about Singapore's future maritime prospects, but highlighted the need to be ready for an upswing in oil prices, Platts reports.
Shipping companies will need to invest in research and development (R&D) to improve their cost structures as low bunker prices cannot be relied upon in the long term, said Chia.
Such investment would enable them to "prepare for the next upswing" in oil prices.
He pointed to statements from oil majors suggesting that investment in capital projects were viable only at benchmark crude prices of around $80 per barrel to $85 per barrel, where as current prices are sitting at around $55 per barrel to $60 per barrel.
In addition, he said that low oil prices benefitted some in the maritime segment, while others were likely to experience less welcome effects.
"Low bunker prices have a positive impact on the shipping industry but our marine and engineering sectors are likely to face some headwinds in securing new orders," said Chia.
One direction for investment focus should be Liquefied Natural Gas (LNG) bunkering.
While Singapore has taken steps in the direction of becoming a hub for LNG bunkering, more can be done.
"LNG is a new space which will continue to play a bigger role in meeting energy demand," said Chia.
"Here in Singapore, for example, we opened our first LNG terminal last year to help secure the country's energy supply and establish ourselves as a hub for LNG bunkering.
"These projects need the right technology and infrastructure in place and the offshore industry is focusing its research and development efforts to support these trends."
Late last year, the Singapore Maritime and Port Authority (MPA) met with Antwerp, Rotterdam, and Zeebrugge ports to discuss the harmonisation of LNG bunkering standards.
