The future for LNG is bright

Despite the current low rates and excess capacity, the future for LNG shipping is bright, was the message from the LNG panel at the Capital Link Shipping, Marine Services & Offshore Forum in London.

The present surplus is due to vessels being delivered before new LNG projects come on stream, but by 2018-2019 as more liquefaction plants are commissioned there could be a deficit of up to 50 LNG carriers. A number of new liquefaction plants will soon become operational, particularly in the US and Australia. There will be a need for more shipping capacity, said Fearnley Securities shipping analyst Jonathan Staubo.

Maran Gas executive vice president (commercial), Anita Odedra told LNG World Shipping there are already signs of some movement towards new orders. «LNG owners are generally disciplined and will not order speculatively, but we will begin to see new orders to meet rising demand from new LNG projects. LNG shipping has a niche group of high quality owners.»

Japan and Korea will continue to be the biggest importers but there will be increasing demand from new markets, such as South America and Africa, said GasLog chief executive Paul Wogan. Total’s recent announcement of a project in Côte d’Ivoire is one example. He commented that uncertainty about LNG prices has resulted in a cautious approach to investment in new plant and ships, with few new orders in the last 12 months, but an emerging deficit of shipping capacity will see rates rise and more orders being contracted.

Ms Odendra said there will be some disposals of older tonnage for scrap or conversion, especially older steam turbine ships. But newer steam-powered LNG carriers are still economic in some segments, even though modern dual-fuel and tri-fuel ships are increasingly efficient.

Hoegh LNG chief executive Sveinung Stohle said there will be increasing demand for floating storage and regasification units (FSRUs) where his company is focusing its investment. They are suitable for new markets as they can be up and running far more quickly than fixed installations. Hoegh has an FSRU coming on stream in Colombia in the next two weeks.

«Hoegh’s view is that demand will come from new importers. Competitive pricing of LNG is opening up new markets,» Mr Stohle said.

source: http://www.lngworldshipping.com/news/view,the-future-for-lng-is-bright_44868.htm