MUSCAT -- In what has been a stellar financial year for the company, Qalhat LNG yet again delivered the highest ever returns in 2012 fuelled by, among other things, an aggressive pursuit of arbitrage opportunities to maximise revenues in an otherwise challenging international LNG market. Qalhat LNG CEO Hafidh al Harthy hailed the company's outstanding financial performance -- its best since inception -- as a testament to its ability to cope and proactively respond to a global economic environment characterised by uncertainty and price fluctuations.
"We are pleased to report that the company has achieved strong financial results in 2012 which include but not limited to generating the highest financial return ever to our shareholders, recording the highest revenue from diversion transactions since inception, achieved higher revenue from condensate and attaining the highest returns from our investments locally and abroad," Al Harthy stated in the company's 2012 Annual Report released here last week.
In large part, the uncertainty surrounding the LNG industry last year stemmed from the ongoing economic crisis in the euro zone, as well as continuing doubts over the resumption of nuclear plants in Japan -- both regions that are major consumers of LNG. Compounding this difficult market situation were oil price fluctuations that inevitably had a bearing on LNG prices in the market, he said. But while the swings in oil prices did boost revenues from the sales of condensate -- a by-product of natural gas liquefaction -- the company had to increasingly resort to cargo diversions to generate additional revenues for the company.
"With the co-operation of our valued long term buyers and the dedication and commitment of our teams to generate additional value, the year 2012 registered the highest diversion revenue earned in the company since inception. "No efforts have been spared in all areas of the business to maximise revenue and/or optimise cost that led to an exceptional bottom line to stakeholders," the CEO said. Significantly, for the first time since it commenced operations, Qalhat LNG successfully diverted all of its cargoes, originally destined for Spain, to the comparatively lucrative markets of the Far East -- a strategic trading manoeuvre that not only added value to the company's bottom line, but also helped to optimise its shipping cost.
"(LNG cargo diversions) not only enabled us to generate more up-side revenue but also significant saving on shipping cost by avoiding passage through the Suez Canal, thereby saving on expensive Canal fees. In this respect, we also received excellent co-operation from our freight provider Oman Shipping Company," the CEO remarked. Further, to offset the high cost of bunker fuel, Qalhat LNG resorted to optisiming shipping costs by 'force vaporising' its own LNG for use as fuel in LNG tankers in place of expensive bunker, he added.
© Oman Daily Observer 2013
