“LNG Carrier Reflagged Under Jones Act Loophole to Service P.R.”, CNG/LNG | INDUSTRYWIDE ISSUES | REGULATION
“For years, we’ve railed against the Jones Act, signed into law in 1920, which requires any ship travels between U.S. ports to be built in the U.S., flagged as a U.S. ship and crewed by Americans….”
LNG Carrier Reflagged Under Jones Act Loophole to Service P.R.
CNG/LNG | INDUSTRYWIDE ISSUES | REGULATION
January 22, 2025
For years, we’ve railed against the Jones Act, signed into law in 1920, which requires any ship that travels between U.S. ports to be built in the U.S., flagged as a U.S. ship and crewed by American citizens (see our Jones Act articles here). No modern LNG cargo carriers qualify as they are all built in other countries, meaning we can’t load a ship along the Gulf Coast (or Atlantic Coast, like Cove Point or Elba Island) with LNG and then transport it to another U.S. port like Boston or Puerto Rico. Shipping giant Crowley has just found a way around that restriction—at least for shipments heading to Puerto Rico.
The Coast Guard Authorization Act of 1996 includes an exemption from the Jones Act for foreign-built vessels constructed before 1996 that allows those ships (if reflagged and American-crewed) to transport LNG or LPG to Puerto Rico from other U.S. ports.
Crowley recently purchased the LNG carrier Puteri Intan (renamed just Intan), which was built in 1994. It is set to make history by becoming the first LNG carrier to be flagged into the U.S. fleet. The Intan is scheduled to arrive at Sabine Pass on January 27th. Sources say it will load and then head to Puerto Rico, meaning some M-U molecules will be heading to P.R.
This is great news. But there’s even better news, which we gleaned from the article below. The U.S. built a series of 16 LNG carriers in the 1970s until 1980 at three domestic shipyards — General Dynamics, Newport News, and Avondale — with each yard using different tank designs. Some of the 16 ships went for international trading and were reflagged out of the U.S. fleet. There is talk that maybe three of those ships could be reflagged for the U.S. and would qualify to carry LNG from port-to-port here at home. How great would that be!
Of course, the REAL solution is to repeal the Jones Act with a new law. That would solve this problem once and for all. It’s nuts that we have to buy ancient vessels to transport LNG to get around a 104-year-old law.
A 31-year-old steam turbine-driven ship is set to make history by becoming the first LNG carrier to be flagged into the US fleet.
Kpler data shows the 130,405-cbm Intan (ex-Puteri Intan, built 1994) is scheduled to arrive at Sabine Pass on 27 January.
Those familiar with the vessel have indicated that the membrane-type ship will be used to lift US-produced cargoes to Puerto Rico.
A US Coast Guard inspection is expected as part of the reflagging process and talk has circulated that the ship will be renamed the American Energy.
Those following the Intan cite a Jones Act exemption in the Coast Guard Authorization Act of 1996 for foreign-built vessels constructed before that year that allows these ships to transport LNG or LPG to Puerto Rico from other US ports.
The Intan was built at France’s Chantier de l’Atlantique.
The Jones Act requires that maritime transport of cargo between points in the US be carried by vessels owned by US citizens and registered under the US flag and built in the country.
Crowley has already confirmed to TradeWinds that it has bought a 130,400-cbm LNG tanker which it said is “part of our ongoing strategic investment to advance energy solutions in the Americas”.
But the company has not yet disclosed how the vessel will be deployed.
The Equasis database shows Crowley LNG became the registered owner of the Intan in December.
But the company’s planned use for the ship may explain why it is thought to have bought such an elderly vessel.
The US did build a series of 16 LNG carriers during the 1970s through to 1980 at three domestic shipyards — General Dynamics, Newport News and Avondale — with each yard using different tank designs.
Some of these went for international trading and were reflagged out of the US fleet. Eight in the so-called “zodiac fleet” of Burmah Gas Transport lifted cargoes between Indonesia and Japan during their early years.
There was talk that three of these vessels — two of which are owned by South Korea’s Sinokor Maritime and one that has since been demolished — could be reflagged back in, but this has not occurred.*
*TradeWinds/Lucy Hine (Jan 20, 2025) – New Crowley vessel set to make history as first LNG ship to be reflagged to US under Jones Act loophole