The “LNG Shipping
Market Review 2003/04” highlights current market characteristics whilst considering all factors influencing its growth as well as forecasting to 2010
London, UK, November 24 2003: Drewry Shipping Consultants, the world’s leading maritime consultants, today announced that its latest report, “LNG Shipping Market Review 2003/04” is now available to purchase. The latest in Drewry’s series of annual reports provides an independent and detailed assessment of the LNG shipping market that has been experiencing discrete, yet substantial, growth since the turn of the century.
The report identifies which market trends have been contributing towards this considerable growth and what will enable the market to sustain it. Various factors apply but, since the turn of the century, there has been a massive surge in interest in the previously conservative LNG business with unprecedented levels of ordering activity for new vessels and much increased interest in new supply projects and new/expanded projects.
Drewry has highlighted the following current market characteristics as key to the LNG shipping industry’s growth:
- LNG trade set to grow at 7-8% per annum for the next decade
- Costs are declining due to new technologies
- South Korea and China emerging as major players
- US Federal Reserve calling for more LNG receiving terminals to be built
- Industry opening up to new players
Drewry’s report highlights new technologies as a key element in the rise of the LNG shipping market by helping to bring costs down and make previously uneconomical projects viable. In ship design, new propulsion systems
aim to replace the traditional steam turbine engines with smaller more efficient units that will not only reduce fuel costs but will also increase cargo carrying capacity. Ships could also be about to become bigger with the new Qatar projects
to supply the USA and UK with gas widely tipped to produce the first order for a 200,000 cu.m ship. Several new ships have been ordered with on board regasification facilities that will open up many new areas to the possibility of LNG imports and help overcome environmental objections to new LNG receiving terminals.
“The remarkable growth currently being experienced within the LNG shipping market is not just a flash in the pan – market conditions indicate that it is likely to continue for at least another ten years due to, amongst other factors, reducing costs, increasing trade opportunities and a host of new entrants coming into the market,” commented Susan Oatway, Director of Bulk Shipping
at Drewry. “Ship demand is likely to grow even faster as long-haul movements from the Middle East and other remote areas, coupled with increased spot and short-term trading, fuels the demand for more shipping capacity.”
In LNG shipbuilding, Drewry points towards South Korea having
clearly stolen a march on their traditional Japanese and European rivals in the recent new orders boom but may be about to face a low-cost challenge with China poised to join the ranks of LNG shipbuilders. Drewry also highlights that China provides
a huge fresh new market for LNG as well and 2002 saw the signing of the first two firm contracts to supply the country with it.
Looking across the Atlantic, Drewry’s research indicates that the USA has been a focal point of much of the recent boom in LNG. The natural gas price spike in the winter of 2000/01, which attracted LNG imports from around the world, led to the announcement of a host of new LNG receiving terminal projects in North America. Then September 11th brought a temporary halt to all imports whilst the collapse of Enron disrupted several LNG projects. The price spike was not repeated in the winter of 2001/02 and some began to question the prospects for LNG, however prices spiked again in the winter of 2002/03 and interest in LNG was dramatically reawakened.
Significantly, the Chairman of the US Federal Reserve Alan
Greenspan brought LNG to wider attention when he called on the USA to build more LNG receiving terminals. Furthermore, Daniel Yergin, author of the Pulitzer Prize winning book ‘The Prize: The Epic Quest for Oil, Money & Power’ on the oil industry dubbed natural gas ‘the next prize’.
The review also analysed the LNG Fleet Orderbook – already a lot of orders have been placed for ships to service the demand with the current Orderbook seeing the fleet expand to 206 vessels by 2006. Drewry’s report warns that this may create some short-term problems mid-decade with new shipping capacity coming on to the market faster than LNG liquefaction or regasification capacity. However, by 2010 approximately 250 vessels will be needed to accommodate the forecast trade and another 40-50 vessels will have to be ordered in the next few years.
These are just some of the findings from Drewry’s Annual LNG Shipping Market Review 2003/04.
“LNG Shipping Market Review 2003/04” is published by Drewry Shipping Consultants Ltd.
Individual copies of the report are priced, including postage to any part of the world.