G2 Ocean: “Project cargo will become a bigger part of our income”
G2 Ocean is on a mission to expand its project cargo business. “We believe we have an interesting value proposition. Our goal is to double in size in the next five years”, Vice President Project Cargo & Innovation Leif Arne Strømmen tells PCJ.
You have just opened new offices in Hamburg and Houston. What’s the vision behind these investments?
“We want to grow our project cargo business. In the past two years, we have seen strong growth in this segment and we want to build on that. Currently, project cargo makes up about 10% of our income. The goal is to double that share in the next five years.”
What is your value proposition? How do you plan to distinguish yourself from your competitors?
“We believe we offer something unique. We are a semi-liner service with high-frequency sailings between North America, South America, Asia and Europe. Our fleet is characterized by large open-hatch vessels, meaning we can carry big volumes at competitive rates, combined with the flexibility a semi liner service offers.”
What markets are you targeting in Houston? Do you expect the oil & gas industry to recover?
“Houston is an important market for G2 Ocean. The city is the capital of projects worldwide; All the major EPC-contractors are based there, and it is close to the Gulf of Mexico, which is an important destination of our liner services. In Houston, we are targeting the oil & gas market, with a special focus on the LNG segment. There’s a good amount of LNG projects in the Gulf of Mexico and additional investment decisions are expected to follow soon. In the oil & gas segment, we are also expecting large upstream projects in certain geographical areas.”
Considering you’re opening an office in Hamburg, you want to grow in the wind energy industry as well?
“Definitely, although Hamburg is about more than just the wind industry. Like Houston is the project’s capital of the world, Hamburg and Germany are the regional centres in Europe for Project Logistics.”
In comparison with other project carriers, your fleet is lacking heavy-lift capabilities. Are you planning to buy or build any new ships?
“It’s true that we do not have the same crane capacity as some of our competitors but our ships can lift 150 tonnes, which makes them a great fit for many projects. Today, we are moving larger components using either shore cranes or floating cranes. We are interested in expanding our scope and services, however, investing in new ships today is risky; There’s too much uncertainty about the future environmental regulation, which makes it hard to choose the right type of propulsion system.”
You mentioned the expansion of your services. Can you elaborate on that?
“We want to expand our engineering services and offer this as a value-added service to our project customers. We expect the focus on safety to increase, especially in the offshore wind industry, where safety standards will be adapted from the oil & gas industry.”
G2 Ocean was formed as a joint venture of Griegstar and Gearbulk in 2017. The company specialises in the forestry products, which makes up about half of the company’s income. Other sources of revenue are breakbulk cargoes like steel and project cargo and dry bulk. In 2018, G2 Ocean recorded income of USD 1,305.5 million and booked a profit from operations of USD 8.5 million.