The LNG sector continues its bull run

Q-Max LNG carrier Al Mafyar
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A record 325 LNG carriers are now on order, equivalent to about half of the existing fleet.

According to Clarkson Research, the vast majority of these vessels – 268 units – will be needed for new liquefaction capacity currently under construction.

There are 309 large LNG carriers on order, but additional newbuild contracts are expected for two US projects — Plaqumines Ph 2 (10 mtpa) and Port Arthur (13 mtpa), Clarkson said. Both developments were positively evaluated this year with final investment decisions.

Nineteen new carriers were on order by mid-April and while this year’s total is unlikely to match last year’s record 184 ships, more than 100 additional ships could be signed this year, analysts said. More than 40% of the ordered LNG tankers include environmentally friendly technologies such as emission savers and air lubrication systems.

While many ships will be required for the new projects, including Qatar’s huge North Field Expansion, for which 66 ships were ordered last year, there will also be significant replacement needs.

The fleet consists of about 241 steam turbine ships, of which 45 units, 17%, are more than 25 years old. But not only the older steamers face an uncertain future.

According to a recent analysis by Lloyd’s Register, most steam turbine ships are likely to fall into IMO’s Carbon Intensity Index (CII) categories D and E because they lack boil-off management systems. The carriers will therefore perform poorly in the first CII ratings even before methane emissions are included in the CII analysis from early 2026.

Meanwhile, a one-knot reduction in speed to cut emissions across the fleet would generate demand for 30 to 40 new ships, Clarkson estimates. However, shipyard capacity could prove to be a limitation. A separate analysis has shown that the six specialized LNG building yards will be practically full by 2027.

The expertise and cost of developing and commissioning new building facilities or adapting existing facilities poses a major challenge, experts say, especially at a time when demand for less sophisticated vessels is urgent. And new ship prices are firm across the board.

Clarkson believes the current momentum in building new LNG carriers will continue. “The LNG sector is still in a major expansion phase,” she concluded.

Source: News Network

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