LNG carrier orders hit record

In 2022, an average of more than three new LNG carriers will be added to the global order?each week, and the current order?for this vessel type has increased to a new record of 323 vessels, representing 49% of the current fleet capacity. As LNG becomes more important in the global energy mix, the capacity of this vessel type will continue to expand.

The changing energy landscape is driving rapid fleet capacity growth and pushing LNG newbuilding prices above US$250 million and likely to rise further, said Aman Sud, chief analyst for the LNG carrier sector at Delury.

There were 739 LNG carriers worldwide by the end of 2022 and although a number of Chinese shipbuilders have entered the sector, the platform remains very tight until the end of 2026, with contracts currently being negotiated for delivery generally through 2027 and 2028.

In the short term, market demand for LNG carriers is hardly likely to cool down. Qatar Petroleum is approaching the second phase of its massive newbuilding programme.

Delury said that around 25 million tonnes per annum of liquefaction capacity will come on stream this year and next, with more than 20 million tonnes per annum of liquefaction capacity reaching a final investment decision (FID) by 2024.

Growth is expected to be particularly strong in the US, where exports to Europe are expected to increase by a whopping 140% in 2022. Aman forecasts that the US is likely to be the country with the highest liquefaction capacity by 2027, followed by Qatar and Australia.

Spot rates for LNG carriers have fallen sharply in recent weeks, partly due to the relatively warm winter in Europe and high stocks, which are already at 84% at the end of 2022. Meanwhile, Asian demand has been relatively weak.

However, rising Chinese demand and a cold European winter could change the market environment at any time, Aman noted, adding that despite the short-term softening of rates, long-term rates remain firm.

The implementation of the IMO's Carbon Intensity Indicator (CII) means that most LNG carriers with steam turbines (around 240 vessels) will fall into categories D and E by 2030. These vessels will require significant retrofitting in order to continue operating in the next decade.

At the same time, Europe's strong push for seaborne LNG imports has pushed up demand for floating storage and regasification units. Since the escalation of the Russia-Ukraine conflict, five new terminals have come on stream and a further eight are under construction.

Source：Maritime-China