LNG Shipping's Dream Run Over?

Drewry Maritime Research
Friday, March 22, 2013
LNG Carrier: Photo credit CCL2

Drewry's latest 'LNG Insight' saw heating demand subside in major importing regions in February & cargo availablilty also tightened.

Regarding cargo availability, a few unplanned shutdowns, caused a 4% decline in the LNG  Freight Index.

LNG shipping enjoyed a dream run during 2011 and 2012, owing largely to increasing tonne-mile demand and an almost stagnant fleet. Freight market prospects would be even brighter if fleet supply were to remain at current levels, but this will not be possible as 81 more vessels could join the fleet during 2013-15, while only 10 vessels could be considered as demolition candidates. The fleet could grow to 430 vessels (accounting for projected demolitions) by the end of 2015, representing a rise of 20% from current levels.

The orderbook-to-fleet ratio was 30% at the end of February, while it was just over 8% at the end of 2010. In 26 months, fresh orders for 89 vessels aggregating 14.5 million cbm were placed.

Based on liquefaction capacity addition plans in Australia and the US, the LNG shipping industry could need many more vessels in the latter half of the decade than are currently on order. A few positive developments in Africa also indicate that LNG production could rise significantly if everything goes as planned.

However, the major concern for shipowners is that not much liquefaction capacity will be added during 2013-15, when most of the new vessels are delivered. Reports of a possible re-start of Japanese nuclear facilities could also return the market to the times when vessels waited for months waiting for employment or for commissioning of the project with which they were ordered.

Japan was the single largest factor driving the market in 2012, and the trend is expected to continue in 2013, as re-starting all of the nuclear facilities cannot be a hurried process. Still, the medium-term outlook for unchartered vessels does not appear bright as about 40 million tonnes per annum of additional production would be required to keep these vessels employed. Unfortunately, this is not on the cards, so the short-term and spot freight markets are likely to start falling soon

The Drewry LNG Freight Index is freight rate assessments based on actual deals and market reports for a conventional LNG carrier of 160,000-173,000 cbm and less than five years of age.

Source:

Drewry's latest 'LNG Insight' saw heating demand subside in major importing regions in February & cargo availablilty also tightened.

Regarding cargo availability, a few unplanned shutdowns, caused a 4% decline in the LNG  Freight Index.

LNG shipping enjoyed a dream run during 2011 and 2012, owing largely to increasing tonne-mile demand and an almost stagnant fleet. Freight market prospects would be even brighter if fleet supply were to remain at current levels, but this will not be possible as 81 more vessels could join the fleet during 2013-15, while only 10 vessels could be considered as demolition candidates. The fleet could grow to 430 vessels (accounting for projected demolitions) by the end of 2015, representing a rise of 20% from current levels.

The orderbook-to-fleet ratio was 30% at the end of February, while it was just over 8% at the end of 2010. In 26 months, fresh orders for 89 vessels aggregating 14.5 million cbm were placed.

Based on liquefaction capacity addition plans in Australia and the US, the LNG shipping industry could need many more vessels in the latter half of the decade than are currently on order. A few positive developments in Africa also indicate that LNG production could rise significantly if everything goes as planned.

However, the major concern for shipowners is that not much liquefaction capacity will be added during 2013-15, when most of the new vessels are delivered. Reports of a possible re-start of Japanese nuclear facilities could also return the market to the times when vessels waited for months waiting for employment or for commissioning of the project with which they were ordered.

Japan was the single largest factor driving the market in 2012, and the trend is expected to continue in 2013, as re-starting all of the nuclear facilities cannot be a hurried process. Still, the medium-term outlook for unchartered vessels does not appear bright as about 40 million tonnes per annum of additional production would be required to keep these vessels employed. Unfortunately, this is not on the cards, so the short-term and spot freight markets are likely to start falling soon

The Drewry LNG Freight Index is freight rate assessments based on actual deals and market reports for a conventional LNG carrier of 160,000-173,000 cbm and less than five years of age.

Source: Drewry LNG Shipping Insight

 

Maritime Reporter July 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Contracts

VT Halter to Build Bouchard ATB Tugs

VT Halter Marine, Inc., a subsidiary of Vision Technologies Systems, Inc. (VT Systems), today announced new contracts to build two 130-foot Articulated Tug Barge

Del Mar Signs Agency Agreement with Ciramar

Del Mar Marine Corp. announced it has signed an agency agreement with Ciramar Shipyards allowing the company to promote Ciramar Shipyard´s docking and facilities

Great Lakes Shipyard Wins EPA Drydock Contract

Great Lakes Shipyard has been awarded a contract for the United States Environmental Protection Agency (EPA) vessel R/V Lake Explorer II. The scope of work will include drydocking,

Tanker Trends

Bill Promotes US LNG Vessel Transport

Congressman John Garamendi (D-CA-03), Ranking Member of the House Transportation and Infrastructure’s Coast Guard and Maritime Transportation Subcommittee, introduced H.

Kurdish Crude Oil Tankships: End-Game Still in Doubt

After a legal show-down in Texas this week, the outlook for a handful of tankers holding some $300 million worth of Kurdish oil is not looking good. Seemingly

Korea Shipbuilder Wins US$400-M Greek Order

Daewoo Shipbuilding & Marine Engineering Co., South Korea’s second-largest shipbuilder, says it has signed a contract to build 4 tankships for Maran Tankers Management,

LNG

Bill Promotes US LNG Vessel Transport

Congressman John Garamendi (D-CA-03), Ranking Member of the House Transportation and Infrastructure’s Coast Guard and Maritime Transportation Subcommittee, introduced H.

Korea Shipbuilder Wins US$400-M Greek Order

Daewoo Shipbuilding & Marine Engineering Co., South Korea’s second-largest shipbuilder, says it has signed a contract to build 4 tankships for Maran Tankers Management,

US DOE Approves Oregon LNG Export Project

The U.S. Energy Department said on Thursday it has approved Oregon LNG to export liquefied natural gas, as the Obama administration works through applications to

 
 
Maritime Security Maritime Standards Naval Architecture Pod Propulsion Port Authority Salvage Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1458 sec (7 req/sec)