GROWING demand for liquefied natural gas in Asian markets risks causing a shortage of transport vessels, the EnergyQuest December report reveals.
According to the report, spot charter rates for LNG carriers with tank capacity of 150,000-170,000m3 stood at US$190,000/day in November, five times higher than in early May.
“The market environment has changed considerably since 2015-2016, when the rates were around US$20,000-30,000/day amid anxiety about a glut of vessels,” the report notes.
“About 600 LNG ships are in use worldwide, and about 40 new vessels are expected to go into service in 2019. However, according to Nippon Yusen, most of the vessels are chartered exclusively for new projects under long-term contracts and only a limited number of them flow into the spot charter market.”
The report noted analysis from the International Energy Agency saying “the risk of a lack of timely investment in the LNG carrier fleet could pose a threat to market development”.
According to EnergyQuest, LNG shipments into Northeast Asia rose to a record in December, driven by China’s continued gasification and colder than normal temperatures in late December.
“Imports into China, Japan, Korea and Taiwan have climbed to 20.5m tonnes to 27 December, 5% higher than the previous record of 19.5m tonnes in January (2018), and nearly 15% higher than November shipments,” EnergyQuest reported.
“Strong imports over the year were driven by maintenance at nuclear power plants and delays in new start-ups.”
EnergyQuest is an Australian energy advisory firm, which provides market analysis and strategy for energy companies, energy buyers, governments and investors.