Oil and Gas News

LNG carriers set to boom: GCEF

GCEF has forecast a balanced global liquefied natural gas (LNG) shipping market in the short-and medium-term with the upcoming commissioning of new LNG carriers.

According to GCEF’s report on the new trends on the global market of LNG carries, by secretariat Aydar Shakirov, at least 142 LNG carriers are expected to come online between 2021 and 2025.

Out of the total number, 46 LNG carriers are to be commissioned in 2021 followed by 38 carriers in 2022. South Korean shipbuilders account for the majority of LNG carriers on the order book. Hyundai, Samsung and Daewoo are going to build 110 carriers, while the Russian firm Zvezda has orders for 15 carriers and China’s Hudong for 11 carriers.

Following the challenges of COVID-19, the market witnessed a reduction in the global gas demand in 2020, which resulted in a slowdown of the global LNG trade and lower-than-expected demand for LNG carriers.

These developments, coupled with the commissioning of a large number of new carriers, led to the oversupply of LNG carriers in the shipping market.

Shakirov reported that over the last decade, the LNG shipping market has loosened, supported by the increasing availability of LNG carriers.

From 2011 to 2020, the ratio fell from 0.73 to 0.59, which implies that in 2020 one LNG carrier transported on average 0.59 million tonnes per annum (mtpa).

In addition, the construction of LNG carries has always been associated with the commissioning of new LNG liquefaction capacity.

The building on LNG carriers in the mid-2000s was largely driven by the completion of LNG plants in Qatar, while in the late 2010s it was driven by the completion of LNG plants in Australia, America and Russia.

Shakirov further highlights that the anticipated increase in global liquefaction capacity, LNG trade and number of LNG shipments are key factors  that will influence the LNG shipping market and incentivise market players to build new LNG carriers in the short- and medium-term.