Conflicts between Russia and Ukraine highly volatile the market and huge trade pattern changes LNG market, getting new LNG is more difficult in current situation, Andrew Buckland, Senior Gas Shipping Analyst for MSI, told a webinar last week.
Speaking at the webinar organized by MSI for the Chinese market Buckland explained that while the surge of new LNG fleet was raising concerns about there not being enough shipbuilding capacity to meet the demand for LNG orders would be better redirected into concerns about there being enough new LNG supply to employ all these ships as they deliver mid-decade. However, this overcapacity will only temporary, as more new liquefaction capacity is coming on stream in the second half of the decade.
The LNG sector has repeatedly suffered from new ships being delivered ahead of liquefaction projects, which often suffer delays, leading to periods of overcapacity in the shipping market.
Since the second quarter of 2021, there has been an unprecedented surge in new orders for LNG carriers. The record level of 86 orders in 2021 have been followed by a further 148 as of date in 2022. Over 230 new vessels have been ordered since April 2021.
Deliveries levels of LNG carriers have slowed in 2022 with just 24 vessels delivered in the first ten months of the year. The orderbook stands at 44% of the capacity of the current fleet compared to under 20% in summer last year.
This year will see lowest level of new deliveries since 2017, the calm before the mid-decade storm, said Buckland. Forty 60,000 cu m vessels are scheduled for delivery in 2023. In 2024, 63 vessels are scheduled for delivery and 82 will be delivered in 2025. Major shipyards are from China and South Korea including Jiangnan, Yangzijiang, Hudong-Zhonghua and DSIC from China and Hyundai Samho, Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering from South Korea.
A significant portion of LNG shipbuilding capacity has been either contracted or reserved by Qatar Energy and its shipping partners for its newbuilding plans of over 100 vessels.
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