LNG SHIPPING GROWING FASTER THAN SUPPLY
The liquefied natural gas (LNG) industry faces an acute dilemma with respect to shipping: whereas there is a robust demand for LNG carriers in the long run, currently the market is oversupplied. Charter rates have plunged just as new-build costs have climbed steeply. This CERA Decision Brief examines the global need for LNG shipping relative to the orderbook and considers the implications for key players.
- The LNG shipping sector is responding to the global LNG opportunity by overinvesting relative to supply.
- The LNG shipping surplus will endure until 2010 and could extend into the next decade.
- Although significant numbers of new ships need to be ordered for service post-2010, availability of shipping and shipyard capacity will not be a constraint on LNG growth.
- The shipping bubble is unlikely to deter further investments given the strategic importance of shipping to producers, buyers, aggregators, and shipowners.
