The new order book represents 54% of the existing cargo capacity LNG Carriersaccording to the latest figures from Clarksons.
According to Sarah Holden, an analyst at Clarksons Research, the strong increase in orders for new LNG carriers will be absorbed in the coming years by new natural gas projects that are expected to be delivered in several regions of the world. In a market where the Greeks shipowners they control 23% of global capacity.
The infrastructure
“While we note that we are currently experiencing a period of weak market conditions as new vessels are delivered to shipping lines ahead of project completion, the industry is expected to see strong profits as new terminals are gradually brought into operation,” noted Ms Sarah Holden.
The “allies” of LNG carriers are the dynamics of the green energy transition and Asian demand for natural gas.
There are two growth factors for the coming decades, since the liquefied natural gas is considered the transition fuel on the path to net zero, while also being the only alternative fuel for which sufficient infrastructure has been developed, as these have been developing over the last 25 years.
“Strong investment in recent years has set the sector up for a significant phase of growth,” Holden said, adding: “Both export capacity and fleet size could expand by more than 40% over the next four years.”
And that’s because the number of new projects will accelerate significantly from next year, with around 60 million tonnes per year of new capacity being added each year from 2025 to 2027, Clarksons Research notes. Growth is led by the US and Qatar, but other countries such as Canada, West Africa and the Middle East will also add capacity.
The latest developments
At the same time, according to the latest data, the disparity between East and West in the freight market for LNG carriers appears to be narrowing, following the significant increase in shipping rates in the Pacific basin.
In particular, according to a recent report by freight broker Fearnleys, freight rates for LNG carriers with a carrying capacity of approximately 160,000 square meters east of Suez have increased by 11,000 per week to reach $50,000/day.
At the same time, rates west of Suez for a vessel of the same specification remained steady on a weekly basis at $65,000/day.
In terms of time charter rates, there has been no increase according to Fearnley. Thus, on a one-year contract, the cost of chartering a TFDE LNG carrier, with a carrying capacity of around 160,000 m3, amounts to $61,000 per day.
This year’s orders, worth 11.5 million cubic meters, already exceed the total for 2023. In total, almost 400 ships have already been signed for construction contracts from 2021 to this year, it is noted.
Of these, the largest share comes from Qatar, whose shipping group has placed 120 new orders for LNFG carriers.
The order book now stands at a record 62.5 million cubic metres, representing 54% of existing fleet capacity, notes Clarksons Research.
market share
Chinese shipyards have expanded their market share and now hold 27% of the ordered LNG shipping capacity, with South Korea still in first place with 70%.
But at the same time, freight rates, also due to delays in the delivery of large natural gas projects, have fallen, with spot market levels averaging $55,000 per day in the first half of this year during a to send 174,000 cbm 2-stroke transmission.
“Deliveries hit earnings as a mild winter and high gas stocks in Europe dampened regional import demand,” Holden explained.