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Global Energy Ventures focused on maiden CNG supply project as it progresses shipbuilding contract

The CNG ship developer is progressing its business case with a focus on Brazil, de-risking investments in the company.

Global Energy Ventures Ltd - Global Energy Ventures focused on maiden CNG supply project as it progresses shipbuilding contract
GEV hopes to target Brazil as a source of marine CNG for its transportation ships
  • Material achievements for 2019 include American Bureau of Shipping (ABS) design approvals for GEV’s Optimum 200 gas ship design 

  • The class approval de-risked investments in the company and was followed by another milestone - appointment of Yantai CIMC Raffles Offshore Limited as preferred shipbuilder 

  • Yantai CIMC Raffles could build four ships for GEV for up to US$140 million each if the parties ink a binding EPC contract 

  • GEV has been progressing plans to make one of its CNG projects a well-advanced project this year 

  • The ship developer is assessing CNG projects across the world, including in Brazil 

  • If successful, GEV’s pipe-to-pipe CNG strategy would see it develop a CNG transport supply chain as a commercially viable alternative to pipelines or LNG for regional markets 

Global Energy Ventures “on the cusp” of success

GEV has had a transformational year and is on the cusp of achieving its maiden CNG project in the current financial year.

GEV is privileged to have the services of a highly competent and world-class management team to deliver its maiden CNG project, which augers well for a successful outcome.

Global Energy Ventures chairman and CEO Maurice Brand

What does Global Energy Ventures do?

Global Energy Ventures Ltd (ASX:GEV) (FRA:WS9) is a compressed natural gas (CNG) company founded in Australia. 

The listed company is led by founder and corporate leader Maurice Brand who previously led Energy World Corporation Ltd (ASX:EWC) (OTCMKTS:EWCLF) and Liquefied Natural Gas Limited (ASX:LNG) (FRA:LI5) (OTCMKTS:LNGLF) (OTCMKTS:LNGLY). 

Brand has more than 30 years’ international energy industry experience. 

What does Global Energy Ventures own?

The key asset for the three years young company is the CNG 200 Optimum ship design, which received milestone American Bureau of Shipping (ABS) design approval earlier this year.

Global Energy Ventures (GEV) hopes to create a global niche for CNG transportation as it commercialises the ship and other projects in its portfolio.

The company, which released its annual results for the 2018-19 fiscal year this week, has a corporate strategy to develop a CNG transport supply chain as a commercially viable alternative to pipelines or liquified natural gas (LNG) use for regional markets across the world.

GEV’s CNG 200 Optimum ship design stores commercial-scale quantities of gas in pipes on the ship and would give gas buyers and exporters an alternative to sending compressed gas by pipelines or having to take the option to liquefy natural gas for non-pipeline transportation.

Yantai CIMC Raffles Offshore Limited (CIMC Raffles) is the preferred shipyard to build four ships, another milestone achievement for GEV achieved in the 2019 fiscal year.

The proposed contract price range for ship builds is US$135 million to US$140 million a ship.

CIMC and GEV have been progressing engineering, procurement and construction (EPC) negotiations towards their proposed shipbuilding milestones.

GEV expects that if it can encourage use of its ships as alternatives to LNG or pipelines, it can help gas users reduce the costs of gas in their projects, changing project economics and improving funding outcomes.

As part of its plan to target the full CNG supply chain, the company is targeting the Australian, Papua New Guinean (PNG), Indian, Brazilian and Middle Eastern gas demand and supply markets.

Up to 80% of the cost of GEV’s CNG projects are shipping fleets, meaning the company can pursue projects in multiple markets without materially increasing the company’s development cost base.

A recent market for the company is Brazil as the transport supply chain developer hopes to progress at least one project to well-advanced status by the end of 2019.

The company is pursuing opportunities to obtain “highly commercial” marine sources of CNG to monetise and has appointed GAIA Importação e Exportação Ltd as its Brazilian country associate for its wholly-owned project in the nation.

GEV stepped away from projects in two Middle Eastern gas market in the 2019 fiscal year and wrote down the value of a UK project.

Chairman Brand highlighted the moves, saying “GEV will not be undertaking further development on its Iran gas supply heads of agreement or in the Port of Chabahar, due to the US sanctions imposed and other factors.”

The company also wrote down the value of a UK project to zero in the fiscal year, highlighting the challenge of achieving economic success in UK and European CNG supply markets.

Economic sources of gas supply are an important factor for GEV which continues to seek a Middle Eastern gas supply so it can progress a heads-of-agreement with Indian Oil Company for sales.

GEV has placed importance on the PNG and Malaysian markets for its commercialisation and advancement as a company.

Brand wrote in the company’s annual report “evaluation work completed in both regions provides the management team with confidence that our CNG Optimum solution is a commercially viable option.”

The chairman-CEO is confident of the company’s continued success over the coming period, writing: “By any objective test, GEV has had a transformational year and is on the cusp of achieving its maiden CNG project in the current financial year.

“GEV is privileged to have the services of a highly competent and world-class management team to deliver its maiden CNG project, which augers well for a successful outcome.”

Inflection points

  • Commercialisation and supply source milestones for projects in key nations
  • 200 Optimum shipbuilding EPC and construction milestones
  • Funding milestones and further project development
  • Development and maturation of CNG shipping as a viable supply chain

Quick facts: Global Energy Ventures Ltd

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Market Cap: $57.43 m
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Global Energy Ventures focused on delivering commercial marine CNG transport

Global Energy Ventures Ltd (ASX:GEV) executive chairman Maurice Brand tells Proactive Investors that the company will capitalise on a niche of marine transportation for Compressed Natural Gas (CNG) by designing and building unique CNG 200 Optimum ships. Once in operation, the ships will...

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