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MOL confident on long term prospects for LNG demand

MOL confident on long term prospects for LNG demand
Mitsui OSK Lines (MOL) is confident about the prospects for LNG shipping in the medium to longer term.

Speaking at Sea Japan 2016, Takeshi Hashimoto, director and senior managing executive officer of MOL, noted that the prices of LNG had plunged over the last one and half years. “Before that thinking about how LNG was going to have explosive growth.”

However, during in this period he noted that Norwegian and Greek owners were very bullish on ordering LNG carriers and this had led to an excess in supply of vessels and a volatile market.

Last year saw what he described as rather flat growth for LNG production to 245m tonnes.

Over the last few days there had been signs that the market had bottomed out. Despite the slump in the market Hashimoto said the, “The forecast for LNG consumption doesn’t have to be changed so much in the long run.”

Over the next few years supply is expected to expand significantly as projects in Australia and the US start to come on stream.

Hashimoto said that the concern should be that there will be an excess in supply.

With low prices for LNG this could spur new countries to start importing gas with the costs of setting up an import terminal reduced greatly due to new floating solutions such as FSRUs. Environmental concerns, including the COP21 agreement would also help drive LNG demand.