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Marubeni, Teekay Join Sea NG for CNG Tanker Deployment

Calgary-based Sea NG Corp. said Tuesday that it has formed an alliance with Marubeni Corp. and Teekay Shipping Corp. for the worldwide commercial deployment of Sea NG's Coselle system for transporting compressed natural gas (CNG) by ship.

Sea NG said the Coselle ship is the only marine vessel fully approved by any international marine classification society for the carriage of CNG. Coselle ships will transport moderate volumes of natural gas (30-700 MMcf) over medium distances (200-1,500 miles). Coselle CNG will serve the market that cannot effectively be supplied by pipelines or liquefied natural gas (LNG). Marine CNG will open pathways for gas delivery to island communities, smaller industrial consumers and will considerably enhance the value of marginal and stranded gas fields.

Allan Keough, Sea NG executive vice president, told NGI that the privately owned company with 18 employees discloses very little about its operations. "We're just very quiet," he said. "We're just head-down on our engineering."

However, Keough did say Sea NG is in the process of formalizing contracts and hopes to have two deals "papered" this year. Once contracts are finalized CNG cargo vessels will be ordered from a shipyard that Keough said is standing by. The first project is likely to entail the use of three vessels, but Keough would not disclose where the project is. He said the company is pursuing opportunities in the Mediterranean and Caribbean.

"We believe there is enormous potential for CNG marine transportation, which will open the door to a new energy business opportunity, and our team is the nearest to the door," said Tomohiko Hirano, a Marubeni general manager.

In September 2006, the American Bureau of Shipping (ABS) approved for construction the first Coselle ship. Coselle is a patented system for storing high-pressure gas in a coil of small diameter pipe. Numerous Coselles are contained within the ship. This storage system has significant cost and safety advantages over conventional large-diameter pressure cylinders, according to Sea NG.

Coselle CNG is said to require minimal onshore facilities. Gas can be loaded and discharged at simple port-side pipeline facilities, which greatly reduces environmental, land-use and financial concerns. Gas can also be trans-shipped at offshore buoys if a port is not accessible. Marine transportation projects using Coselle CNG are currently under development in numerous countries.

Marubeni Corp. trades in a broad range of industrial, agricultural and consumer goods, commodities and natural resources, serving the world's economies as a supplier and as a wholesale dealer. Marubeni assists in the arrangement or provision of debt and equity finance, acts as the lead contractor with other companies responsible for engineering, procurement and construction as necessary and, by utilizing its trading function, assists in the supply of feedstock and the offtake of product under long-term contracts.

Teekay Shipping transports more than 10% of the world's seaborne oil and has expanded into LNG shipping through publicly listed subsidiary Teekay LNG Partners LP, and into the offshore production, storage and transportation sector through publicly listed subsidiary Teekay Offshore Partners LP. With a fleet of more than 150 vessels, Teekay provides marine services to the world's leading oil and gas companies.

CNG ocean transport for natural gas has been found to be economically competitive with LNG and subsea pipelines for gas fields with reserves of 1-3 Tcf and greater and located about 300 to 1,500 nautical miles from market, John Dunlop, vice president of business development for Houston-based marine CNG developer EnerSea Transport LLC, told NGI. EnerSea is a competitor to Sea NG and uses a different technology. According to EnerSea, regions actively investigating CNG transport projects are Atlantic Canada, Caribbean/Northern South America, South America, Mediterranean, Subcontinent Asia, Southeast Asia and Australia/New Zealand.

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