MJLF Research – September 2013

MJLF Research – September 2013
Jones Act Market Overview & Outlook
MJLF and Associates
Page 1
MJLF Report Private and Confidential
Tanker Market Outlook:
• Jones Act Overview
• USG Production and Pipeline Profile
• USWC Rail Terminal Development
• Conclusion
General Maritime
Corporation
MJLF and Associates
Page 2
Jones Act Overview – Current Fleet
•
•
•
Current bluewater fleet between 19-55K DWT consists of 34 Tankers and 42
Tug/Barges
Additionally, 11 tankers are tied to Alaska-USWC trades
Current bluewater order book
• 2 ATBs from Halter to Bouchard (2014)
• 4 MR tanker from Aker to Crowley (2016-2017)
• 4 MR tankers from NASSCO to APT (2015-2016)
• 2 MR tankers from NASSCO to Seabulk (2016-2017)
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Jones Act Overview – Fleet by Trade
(Aug 2013 Excluding Alaska Fleet)
•
The vast majority of the Jones Act fleet remains tied to CPP and DPP trades in the
USG and USWC
Crude trade requirements comprise only 32% of current trading patterns,
however, they have tightened utilization for Jones Act tankers to the historically
significant +90% threshold
•
40
35
30
25
20
37
15
24
10
5
8
5
0
CPP
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Associates
Associates
DPP
OIL
CHEM
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Jones Act Overview – Fleet by Charterer
(Not including Newbuildings)
•
Increasing Jones Act requirements have forced charterers into term charter
markets as tanker and barge spot market availability has been sharply reduced
18
16
14
# Vessels
12
10
8
6
4
2
0
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Jones Act Overview – Term Charter
Rate Structure
•
•
Jones Act 3 Year Term Charter have achieved the $ 75k/day level
1 year term charter rates have broken the $ 100k/day level on American
Phoenix relet
Tanker (Earnings/$day)
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$‐
Jan‐03
Jan‐04
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Jan‐05
Jan‐06
Jan‐07
Jan‐08
Jan‐09
Jan‐10
Jan‐11
Jan‐12
Jan‐13
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Tanker Market Outlook:
• Jones Act Overview
• USG Production and Pipeline Profile
• USWC Rail Terminal Development
• Conclusion
General Maritime
Corporation
MJLF and Associates
Page 7
USG Production and Pipeline Profile:
2013 Assessment
•
Texas Production +
Pipe-In Capacity
(Seaway): 1.63 MMB/d
•
Pipe-In
Pipe-Out Capacity:
(HoHo + Permian
Express + Centurion):
400 KB/d
Pipe-Out
Permian
Texas Shale Production
(KB/d 2013)
1250
1000
750
500
250
0
2013
Eagle Ford
Permian Shales
Barnett
Granite Wash
2013: 1.2 MMB/d of inland crude to be refined or moved on water**
**Does not include conventional Texas crude production
MJLF and Associates
Page 8
USG Production and Pipeline Profile:
2020 Forecast
•
Texas Production +
Pipe-In Capacity
(Seaway + Cushing
Market Link): 4.1 MMB/d
•
Pipe-In
Pipe-Out Capacity:
(HoHo + Permian
Express + Centurion):
835 KB/d
Pipe-Out
Permian
Texas Shale Production
(KB/d 2013 v 2020)
2750
2500
2250
2000
1750
1500
1250
1000
750
500
250
0
2013
Eagle Ford
Permian Shales
2020E
Barnett
Granite Wash
2020: 3.3 MMB/d of inland crude to be refined or moved on water**
**Does not include conventional Texas crude production
MJLF and Associates
Page 9
Tanker Market Outlook:
• Jones Act Overview
• USG Production and Pipeline Profile
• USWC Rail Terminal Development
• Conclusion
General Maritime
Corporation
MJLF and Associates
Page 10
USWC Rail Terminal Development
•
•
•
If all rail Terminals are
built, 800 KB/d of
capacity will be added
exceeding regional
refining throughput
Total USWC refining
capacity is estimated at
2.8 MMB/d, w/ 1.75
MMB/d of capacity in
California
As a result intra Pacific
Northwest-California
barge and tanker trade
are forecasted to expand
*
*
*
*
General Maritime
Corporation
MJLF and Associates
Page 11
Tanker Market Outlook:
• Jones Act Overview
• USG Production and Pipeline Profile
• USWC Rail Terminal Development
• Conclusion
General Maritime
Corporation
MJLF and Associates
Page 12
Tanker Market Outlook: Table of
Contents
Limited incremental shipyard capacity, USG and USWC
trade flow expansion, and scrapping of aging barge
tonnage will keep upward pressure on Jones Act markets
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Page 13