Industry Insight: An interview with Samir Bailouni, Nakilat (Qatar Gas Transport Co.)

Samir Bailouni, Nakilat

Nakilat is a Qatari company that ships LNG from Qatar mega projects to the world. Nakilat owns into 61 LNG vessels. We own 100% of 25 of our vessels, (all 14 QMax and 11 QFlex) and the others are 43% owned on aggregate. We also co-own four VLGCs.

Of our 61 LNG vessels, 54 are on long term charters to Qatargas or RasGas while the remaining seven are chartered into the international market. Nakilat has several joint ventures to support its business, including a state-of-the-art ship repair yard N-KOM, as well as NDSQ; which is responsible for shipbuilding and refurbishment of special vessels up to 170 meters in length; towage affiliate NSW and agency NAC.

How do you promote the use of gas as a marine fuel (use of LNG)?

We work together with partners and affiliates to develop LNG as a marine fuel including our N-KOM and NDSQ, now that a more strict low sulphur fuel requirement has come into force for ECA and is poised to expand. Alternative fuels are being considered and certainly LNG is one of the leading alternatives. Nakilat and our charterers are working intensively on a pilot project to modify one of the QMax vessels to MEGI at N-KOM, starting in April 2015, and this project is attracting keen interest from the shipping industry because it is a first for slow speed diesel engines. N-KOM has developed engineering solutions for converting large vessels for LNG tank retrofitting and burning as fuel, and we have already signed MOUs with some key partners. NDSQ is building a large gas- fuelled tug to be operated by our NSW and chartered to the port.

What is Nakilat hoping to achieve in the next 5 years?

We believe that the use of LNG as marine fuel in the shipping industry is going to grow exponentially after the low sulphur fuel requirement in ECA came into force. Nakilat and its affiliates have a role to play in gas-burning small vessels construction, conversion of large vessels and more MEGI retrofitting.

What questions are important to you when you decide to buy a new carrier/retrofit your existing carriers?

Vessels must comply with the international legislations and local regulations; however, when considering alternative fuels or new technologies - whether retrofit or new
build -considerations also focus on safety, proven technology reliability, practicality and commercial business sense.

As the world's largest exporter of gas, how has the price of crude oil had an effect on your business?

Since Nakilat vessels are time chartered, the fuel is provided by the respective charterer. However, we are part of the international shipping community where crude oil prices will have some influence on the cost of lubricating oils, paints and other products impacted by crude oil prices.

What are your thoughts on the Chicken and Egg scenario for the gas industry (ship owners not investing in gas fuelled ships because the infrastructure is not ready)?

Eventually, the growing supply and demand will generate the required confidence
for investors on both ends. As we have already seen, the growth has been rapid and is expected to continue encouraged by authorities like the EC.

Your employees – how important are they to you?

Our employees are our most valuable assets – although our vessels come in a close second! We're very selective about whom we hire, and we only choose people who are going to drive the company forward. Training and development is important to us, and we manage the attraction and development of our employees closely.

What do you do to promote/ encourage innovation?

At Nakilat, we believe that efficiency and optimisation are key to continued innovation. We have a working group in place on an ongoing basis that engages with our staff to look for areas where we can improve. This working group makes proposals, carries out studies and evaluates projects that we implement. The aim is continuous improvement. We also offer a generous bonus structure that rewards those who have contributed most to our success, which encourages our employees to be creative and innovative.

How do you disseminate best practice and share your knowledge and expertise?

Nakilat is fortunate to have partnerships with many of the world's leading shipping companies. Twice a year, we participate in a two-day Qatar Projects Shipping Forum, where we intensively discuss industry movements, new trends and technologies, share knowledge and discuss our experiences. Nakilat is fortunate to have partnerships with some of the world's leading shipping companies, with whom we share best practices as standard.

What role does safety and training play in your organisation?

Safety is paramount, and each and every one of our employees is dedicated to ensuring
that Nakilat's impressive safety record is maintained. Since our inception in 2004, we have consistently invested in top quality safety mechanisms and training programmes. It's difficult to improve from an excellent base, but we are aiming high, and recently introduced the Injury and Incident Free campaign.

Organisations that have global operations – are you in a position to assist them?

Nakilat is a young company that is growing at an ambitious pace. Naturally, we will pursue strategic partnerships with other companies that share our interests and values where it makes business sense to do so. We already have hugely positive relationships with a number of global organisations.

The values in your mission statement – are they important to you and how do you disseminate them throughout the entire business?

Nakilat and its staff take the vision and mission as serious goals to be aspired to, and not something just to put on the wall or in our brochures. Annual reviews are made inviting employees at all levels to engage and openly contribute in order that what is stated reflects a common understanding and alignment amongst all.

Your goal of positioning the State of Qatar as an internationally recognized center of excellence in gas and gas products shipping, ship building, repair and conversion, and marine services – is this achievable?

Absolutely. It's already happening, and despite international challenges, we're ahead of schedule. Our continued investment in infrastructure and expansion, Qatar's position as a global hub, and the support of the Qatari authorities are factors that are unmatched globally. Our goal is to continue to consolidate the success we have had to date, and provide consistently excellent services.

Do you engage in any corporate social responsibilities (CSR) with your local community or in general?

At Nakilat, we are passionate about engaging with our local community. Recently, we participated in a community safety day where we educated adults and children of all ages on general safety principles. We also took part in Qatar's annual Sports Day, hosting a whole day of fun activities for our employees and their families. We take part in environmentally-friendly activities like beach cleaning, support Qatari's education by going on school visits, support blood drives, and take part in numerous charity events throughout the year.

Are there any projects that you are working on right now that you think will affect Nakilat's standing in the maritime/Oil & Gas industry?

As mentioned earlier, the MEGI project is already attracting huge interest from the international shipping industry. The state-of-the-art facilities alongside our commitment to service excellence will see Nakilat's already excellent reputation continue to grow.

Why did you join SGMF?

Our primary goal is to become an integral part of the international shipping community, in order to share our own experience for the benefit of the industry, and to help protect the gas shipping industry's exemplary safety record. This didn't materialise in a vacuum, particularly when you consider that LNG is poised to be used as a marine fuel by non-LNG carriers and by staff whom aren't fully trained in handling LNG.

What are you hoping to get from SGMF membership?

Our aim is to show what Nakilat has to give, rather than what we can take away. As a founding SGMF member, we hope to use our influence to support industry safety and best practices. We also hope to build on and create relationships with other members of the society.

If you could change one thing about your industry, what would it be and why?

At Nakilat, we understand that with the pace of change in our industry, we need to attract the brightest young minds into careers in gas shipping, so for us, more investment in educating the next generation on the industry would be a major change and a progressive step.

On behalf of SGMF, Samir, thank you for your time.