Teekay: LNG exports rise with new liquefaction trains coming online (Video)

Exports of liquefied natural gas during the first nine months of 2016 have increased by 15 million tons, compared to the same period in 2015. 

The trade increased significantly in the third quarter of 2016, with export trains coming online in Australia, the USA, and Malaysia, and production resuming at the Gorgon and Angola projects.

Talking about LNG trade, Teekay’s Research Projects Manager, Nicholas Schneider said that for 2016, as a whole, LNG trade is on track to increase by 20 to 25 million tonnes compared to 2015, or 8 percent to 10 percent.

This increase in LNG trade will be roughly matched by an increase in the LNG fleet, which we expect to increase by 8 percent to 10 percent by year-end. As a result, broker assessed short-term charter rates for LNG vessels have remained relatively unchanged for much of 2016.

Commenting on the charter rates in Teekay’s third quarter LNG market update, Schneider said that the fleet availability is becoming tighter, as demonstrated by the increase in rates in the third quarter of 2016.

The number of vessels available on the short-term market has fallen from approximately 30 vessels at the start of 2016 to less than 20 vessels as of October 2016.

LNG trade rising faster than fleet supply

After several years of the LNG fleet growing faster than the demand for vessels, LNG trade is now increasing faster than fleet supply.

By the end of 2017, between 10 and 12 new LNG exports trains are scheduled to come online in Australia, the USA, Russia, Malaysia and West Africa. In total, LNG trade should increase by approximately 30 million tonnes next year, or close to 11 percent.

In contrast, the LNG fleet should increase by roughly 8 percent next year, leading to an increase in fleet utilization over the course of 2017.

In the longer-term, this trend will continue through the end of the decade. The current orderbook for LNG vessels is equivalent to approximately 31 percent of the fleet, whereas LNG trade expected to grow by more than 40 percent.

Schneider provides further insight into the LNG charter rates as well as LPG shipping in the video below.

LNG World News Staff