Gastech takeaways
It was thoroughly enjoyable to attend Gastech earlier this month to support clients, meet some newer contacts in person, see many people I’ve not seen for years and hear opinions on latest industry developments, ideas and trends. Excellent venue, well-organised and well-attended. Full marks to Singapore. In the spirit of sharing, my personal takeaways are:
People
We remain social animals. Exhibitors that laid on the snacks and refreshments attracted the masses. Conversations flowed that probably wouldn’t happen on a video call.
There is a well-known common concern about the growing shortage of LNG (and ‘gas’ in general) operational skills & experience – for both sea and shore roles. Growing these skills is a much (much) slower activity than it is to build the new ships. Incubating & retaining skills is a parallel challenge. ‘Experience matrix’ minimum requirements are coming under more pressure than ever.
The same applies for skills needed in handling new fuels. Various strategies were shared and discussed about how best to manage this complex issue (problem!).
I spoke with many people in shore-based roles who shared that more time than ever is now spent in support of x-functional initiatives. It is becoming increasingly difficult to link some of these with the objective of maximising shareholder returns over the long-term. This is causing some frustration from leaders down to the operational frontlines.
Technology
CII ratings are very much on people’s minds. Appetite to invest in hardware technologies that reduce fuel consumption (& therefore expensive emissions) was more visible than it was at the last event in Milan 2022. In particular, there is significant uptake on Air Lubrication Systems (ALS) being installed at newbuild and through retrofit that have had in-service performance independently verified.
People have become much more confident in adopting digital decision support tools & systems in general. Many were comparing insights on the savings & cost avoidance benefits of the products they had selected or are in the process of testing. Those still wedded to internal legacy systems are likely at a growing disadvantage.
Connectivity between ship and shore is often permanent and data exchanges can be in real time. It must feel like having ‘the office’ on the vessel for many shipboard management teams, but some companies have designed systems & ways of working that realise the intended benefits of this capability (ie: remove admin from shipboard teams, gain insight to efficiency opportunities through meaningful data & allow people to focus on what they are paid to be responsible for managing).
Other
Europe is short on competent gas ship repairers & yard space. Some companies have already changed their traditional methods to lock in preferred dates (when available) – moving the process from procurement teams to those that manage overall PnL.
There are understandable standoffs between owners and charterers on clauses about redelivery CII ratings. The former want ‘no lower’ than the delivery rating; the latter argue that they’ve paid a market price for use of the asset. I’m still mulling one idea I discussed with an interested group with interests (bias) on each side of this debate.
There were several companies present with interests in both oil as well as gas ships. Uncertainty related to fuel type(s) is a headache hindering oil tanker new orders (as well as yard space and, obviously, hefty price tags). Age policy upper limits will be tested in this sector and knock-on environmental implications no doubt firmly on risk registers.
I may have missed it, but I was somewhat surprised to not hear any commentary supporting a tax on ‘nice to have’ consumption; that feels like the biggest lever left to really drive decarbonisation.
There are no shortages of challenges and therefore opportunities in the industry. The common denominator for success remains the people. Companies that develop, maintain & attract the best people will thrive through this energy transition. Those that don’t are likely to be remembered as non-runners.
stonefort marine’s businesses specialise in strategic and people related challenges across the industry. Organisations that are proficient in managing both are well-positioned for success.
As always, thoughts and feedback are welcome - so please do feel free to get in touch.