The LNG carrier market is not facing a shipping glut despite falling spot rates and 100 newbuildings on order, according to consultants Tri-Zen.

Tony Regan, principal consultant for Tri-Zen said although 100 vessels had been ordered at the top of the market, resulting in a surplus at present, many more would be needed to meet projected demand for LNG by 2020.

"We are still forecasting a doubling of LNG demand between 2010 and 2020, very strong growth," Regan told a DNB Markets conference in Singapore on Wednesday.

He cited figures from Mitsui OSK Lines, which although showing a surplus of 19 vessels this 160 more newbuildings would be needed to meet demand by 2020. "In 2014 we might be a bit long on tonnage, but we are going to need a lot more vessels ordered if we are to meet this demand target for 2020," he said.

LNG carriers enjoyed a huge peak in spot rates in 2011 and 2012, when Japanese demand soared after the Fukushima nuclear disaster. With the number of available vessels in the market dipping as low at two at a time spot rates hit $150,000 per day.

By contrast with 13 vessels available in the market last week spot rates have come down to around $55,000 daily.  "It will improve but probably not significantly for a year or two," Regan said.

One of the issues has been delays in liquefaction plants, while shipyards have built and delivered the vessels on time, leaving newbuildings trading in the spot market until the liquefaction plants come onstream.

On the demand side Regan noted three new import terminals in China last year, and two or three more this year. "So we are going to see very dramatic growth in imports."

Concerns over security of gas supply in Europe due to Russian involvement in the political crisis in Ukraine and Crimea have sparked a need to look for alternative sources of supply. "President Putin has done a wonderful service to the LNG industry and many people are now focussing on how we can replace Russian gas in Europe with LNG," Regan said.

Another factor in driving future demand is the growing use of FSRUs. "They've been very popular in South America, also the Middle East and most recently in China where the first FSRU has gone into Tianjin. If you want an import terminal this is much quicker and cheaper way of going about it, probably about one third of the cost," he explained.

Currently there are 10 FSRUs on order and around 26 FSRUs proposed around the world.