Shipping rates may decline in the next two years as the number of tankers available to carry liquefied natural gas may surge by about 46 per cent while supplies of the fuel get delayed.
But given the long-term nature of the liquefied natural gas business, the oversupply will not impact chartering rates in the long term.
The number of LNG tankers may increase to more than 360 by 2010 from 246, PVM Oil Associates GmbH said in a report emailed to Bloomberg yesterday. Global LNG trade may climb by 6 per cent a year by 2010, while LNG shipping capacity may grow at about 15 per cent, the Vienna-based consultant said.
Companies like Petronet LNG Ltd and China National Offshore Oil Corp may benefit as they will pay lower to import individual LNG cargoes to meet soaring demand of the clean fuel.
Gas processing projects are being delayed because a shortage of contractors and construction equipment is pushing costs higher. 'When all these ships with above average capacity are launched in the near future, overcapacity could be looming and it would not come as a surprise if LNG shipping rates come under pressure,' the report said.
Qatar, the world's biggest LNG producer, has ordered 45 LNG tankers from South Korean shipyards capable of carrying more than 200,000 cubic metres each. Qatar Gas Transport Co, or Nakilat, will receive by 2010 31 Q-Flex and 14 Q-Max, the world's biggest class of LNG tankers of 266,000 cubic metres in capacity.
By January 2008, Korean shipbuilders are scheduled to deliver eight Q-Flex tankers capable of carrying a maximum 216,000 cubic metres each, Russell Barling, a spokesman for Lloyd's Register, said in an email on Nov 26. Each Q-Flex cargo is enough to power South Korean households for two days.
The global LNG shipping capacity may increase by about 75 per cent to more than 50 million cubic metres by 2010 because some of the newer ships on order are as much as 83 per cent bigger than existing carriers, the report said.
There is a surplus of LNG tankers in the near-term because of delays in liquefaction projects, Jan Kopernicki, vice- president, shipping, Shell International Trading and Shipping Co Ltd, said at a briefing last month.
Unlike the crude market where vessels are built without a planned destination, LNG carriers are tied to specific customers for as long as 25 years, the report said.
Given the long-term nature of the LNG business, the oversupply will not impact chartering rates in the long term, Mr Kopernicki said.
There are 130 LNG carriers on order. About 60 may be ready next year, 45 in 2009 and the rest in 2010 or later, the report said. |
