Gaztransport Et Technigaz

Gaztransport Et Technigaz (“GTT”) is a French-listed engineering company and the global leader of containment systems for the transportation and storage of liquefied natural gas (LNG). In addition to its core containment technology, GTT provides consultancy and technical design services to the shipping industry.  

GTT serves a growing market, with demand for LNG expected to expand by around 60% from 2025 to 2040 as the world replaces coal with lower carbon intensity gas and global flows of energy increase. This will require a corresponding increase in tanker capacity, from which GTT is well placed to benefit. The steel membranes used in LNG tankers are critical to their safe operation, preventing leakage of gas to ensure safety and to protect against any loss of value on long voyages. Although membranes make up a relatively small part of the cost of any tanker, they are an important component, where no risk can be taken by ship owners. GTT’s track record of safe operation, backed up by a high level of investment in R&D and continued product improvement, means GTT has 100% market share. We see it as extremely difficult to displace GTT, with shipowners and insurers unwilling to risk a new supplier, especially given any containment issues are only likely to be apparent after a vessel has been in operation for a decade.  This gives GTT pricing power in negotiations, and high margins (67% EBITDA margin in 2025), although GTT is careful to manage its relationship with ship builders and not increases prices beyond what is acceptable. 

Looking ahead we see two main sources of upside to the shares. 

The first driver of growth is the expected duration of orders for GTT’s core LNG membrane technology. To date, the market has mainly grown in line with globally traded gas volumes, with the requirement for tankers matching gas volumes. However, we are starting to see two important changes. Firstly, the flows of gas around the world are shifting, with more growth coming from North America. Supplying Asia from the US requires significantly longer voyages, approximately twice the distance compared with Middle Eastern routes, driving tanker demand as more vessels are needed to transport the same volume of gas. It also increases the importance of using newer vessels with the best containment technology to minimise loss of gas on such long journeys. Secondly, and the more important change, is that we are entering the start of the replacement cycle for LNG carriers. The market only started to grow in the 1990s, meaning that there has been limited replacement of old vessels to date, with all growth coming from market expansion. That is changing as old vessels become inefficient and need to be replaced. On average there were around three vessels scrapped each year from 2016 to 2024. In 2025 there were 19, and this replacement rate is likely to accelerate, especially if fuel costs are higher.  

The second driver for growth comes from GTT’s ability to diversify its business into adjacent markets. As well as selling containment technology to LNG carriers, it also offers solutions for other tankers and for vessels using LNG as a fuel which is a growing market. It has consistently reinvested cash into other businesses, building up a digital services presence, with data recording technology installed on over 15,000 vessels. This allows it to cross-sell voyage management tools and consulting services to the wider shipping industry, with a high return on capital. To date, GTT has not fully monetised this installed base and we expect to see more focus on pricing and cross selling under a recently appointed CEO. 

Overall, we see GTT as having strong pricing power in its core market and being highly cash generative, supporting an attractive dividend for investors while also funding continued investment in innovation and growth. Although the shares have performed well, GTT’s uniquely strong position in a growing market merits a valuation premium to the market.  

Note: Source for LNG market demand growth is Shell annual LNG Market Outlook, 2025. All other data from GTT presentations.