Liquefied Natural Gas (LNG)
Demand for LNG carriers in Europe has surged this year as European buyers become more concerned about gas supplies, with freight rates and rents for LNG carriers rising sharply.
LNG prices rose from a low of less than $2 per million British thermal units in 2020 to a high of $57 in August, the data showed.
Despite recent declines, it remains above $30 per million British thermal units.
The demand for heating has led European countries to scramble to ship energy, pushing global LNG shipping rates to record highs.
The daily rental rate for 174,000 square meters of LNG in the Asia-Pacific region rose from $66,000 in early August to $300,000 in early October, while the Atlantic region rose from $74,000 to $300,000.
Long-term leases are getting more expensive.
At present, LNG ships have "replaced" container ships, and market share jumped to the first.
As of the end of July 2022, gas carriers surpassed container ships to become the workhorse ship type with the largest market share, data showed.
Among them, 101 large LNG ships were transacted, setting another annual record.
Why are LNG ships suddenly in short supply?
1. The entry into force of the new rules
The requirements for the Ship Energy Efficiency Index (EEXI) and Carbon Index (CII) established by the International Maritime Organization (IMO) will take effect in the near future.
This means that many older LNG ships will not be able to meet carbon emissions standards, or will have to slow down to do so.
This will require the replenishment of additional LNG vessels to meet existing capacity levels.
The typical life cycle of an LNG ship is about 25 years.
About 24% of the LNG fleet is over 15 years old, and 10% of the fleet is over 20 years old.
Due to environmental restrictions in the shipping industry and the obsolescence of LNG ships with high age, the high popularity of LNG ships will continue.
2. Natural gas production capacity improvement
Capacity expansion in major LNG ship regions around the world has boosted the market for large LNG ships.
For example, the Qatar North Gas Field expansion project will increase Qatar's annual LNG production capacity from 77 million tons to 126 million tons by 2027.
Mr. Clarkson expects the volume of LNG ships to grow by 65 percent in the next 10 years.
It expects sea traffic to reach 630 million tons by 2030, up from 380 million tons in 2021.
3. High-tech products
LNG ships are rated as one of the "crown jewels of the shipbuilding industry".
It is a special ship with high technology, high reliability, and high added value recognized in the world.
At present, there are a limited number of shipyards building large LNG ships in the world.
Only a dozen shipyards have production capacity, and the ship has been scheduled until 2027.
Some industry experts said that the construction of large LNG ships is very difficult, only a few shipyards in Japan, and South Korea can build it.
And it is difficult to meet the market demand for LNG ships in the short term.
Natural gas is a very low-density gas energy.
There are only two ways to do this:
1. Pipeline gas transmission.
2. With the help of large LNG ships, the natural gas will be liquefied at low temperatures and transported in large quantities.
