Keep pace with ferry and fast craft developments.
(click on image to subscribe)
April 19, 2004
Massive LNG ship newbuilding program needed?
World LNG demand is forecast to rise from 158 billion cubic meters (bcm) to 269 bcm by 2010 and to 428.5 bcm by 2020. This growth represents an average annual trade growth of 7.6% over the near-term, with a slowing to 5.4% through to 2015 and 4.9% up to 2020. Such trade growth will necessitate an increased vessel building programme. Currently there are 59 vessels on order, but to match the expected development of trade volumes an additional 33 vessels are required through to 2010, 76 vessels in the period 2010-15 and 83 vessels up to 2020. These are some of the findings of a new report on the rapidly evolving LNG sector, published by the U.K.-based independent research company Ocean Shipping Consultants Ltd.
The 163-page detailed report entitled 'World LNG to 2020: Prospects for Trade & Shipping' forecasts that an extra US$5.0 billion of additional newbuilding vessel investment is required before 2010 and a further US$24.1billion through to 2020. Trading patterns are set to change significantly over the next decade as new markets and suppliers emerge, vessel capacities are increased and the spot market grows in prominence.
LNG Fleet & Shipping Requirements to 2020
- Currently there are 59 vessels on order, which represents a total cargo capacity of 8.2 million cubic metres (mcm). This represents an additional 46% of LNG capacity due to commence trading over the next 2-3 years.
- Given the age profile of the current fleet, the volume of vessel scrapping over the near-term is likely to continue to be low, although there will inevitably be higher levels of vessel demolition later in the study period.
- From the current level of 17.7 mcm, the required LNG fleet is forecast at over 30.4 mcm by 2010, rising to over 52.4 mcm by 2020. In order to handle anticipated trade volumes and patterns therefore, the LNG fleet will need to expand by over 12.7 mcm (72%) in the period to 2010 and by 34.7 mcm (196%) in the overall period to 2020.
- A total of 4.6 mcm of new tonnage (in addition to that currently on order) will need to be ordered and delivered in the second half of the current decade to match the expected development of trade volumes and patterns over the interim period. For the 2010-15 period, a total of 10.5 mcm of new fleet capacity will be required, with 11.5 mcm needed for the 2015-20 period. For the future study period as a whole, a total of 26.5 mcm of new LNG capacity will be required, in addition to the 8.2 mcm of new capacity currently on order at Asian and European yards.
- There will be a requirement for the equivalent of a total of 92 large vessels (of around 138,000 cu.m capacity) to be delivered in the period to 2010, with an extra 76 vessels in the subsequent half-decade and an additional 83 through to the end of the study period. With 59 vessels already on order, this implies a need for 33 new orders to be delivered in the remainder of the current decade, and 159 vessels between 2010 and 2020.
- At current newbuilding prices, the forecast vessel requirements translate to US$5.1 billion of extra new orders to be placed up to 2010, and a further US$24.1billion in the following decade.
- The current orderbook will be sufficient for the anticipated trade expansion over the near-term, with an inevitable time-lag between vessel completion and full active employment resulting in vessel supply exceeding demand by 2-3 mcm over 2005-07. However, a shortage of 1.8 mcm vessel capacity is anticipated by 2009 and a massive 4.3 mcm by 2010.
- If LNG supplies from a leading exporter were cut off due for example to terrorist actions f, the effect could be a massive boost in vessel requirements, due to the required re-routing of supplies from other sources. In the case of Algeria, this could be the equivalent of 28 extra vessels at the present time, rising to 33 vessels by 2010. However, a more likely scenario will see the European pipeline network increase capacity in the near-term and thus reduce the extra number of vessels required to transport LNG to the European markets.
The study price is : £850 (UK) or US$1600 (overseas) for printed or electronic version
Details from :
Study Sales Dept., Ocean Shipping Consultants Ltd, Ocean House,
60 Guildford Street, Chertsey, Surrey KT16 9BE, England.
Telephone : (0)1932 560332 Fax : (0)1932 567084