2014: An Explosive Year For Gas Carriers?

Whilst overall newbuilding interest subsided last year, the gas sector was one of the few areas to see contracting rise year-on-year and a record level of ordering was seen for LNG and LPG carriers in 2014. This month, we take a look at the owner nations that have been most active in ordering and the trends in regional ownership of the global gas carrier fleet.

Gas Ordering On A High

Last year a record 176 gas carriers of a combined 16.6m cbm were contracted globally, up 49% y-o-y in terms of cbm. LNG carriers accounted for 42% oforders and 66% of capacity whilst a record volume of LPG tonnage was ordered (5.6m cbm), with strong newbuilding interest for Very Large Gas Carriers (54 orders, a record). This surge in ordering has led to a 40% increase in the volume of gas carrier tonnage on order since the start of 2014 and the sector’s orderbook currently totals 34.6m cbm – equivalent to 10% of the global orderbook in GT terms.

Who’s Fuelled Ordering?

Gas sector ordering has been concentrated amongst a relatively small number of owner nations and the top 5, in terms of cbm on order, account for 65% of the gas carrier orderbook and 48% of the current fleet. Greek owners have the largest LNG and LPG carrier orderbook globally, totalling 7.8m cbm, though this is mainly LNG units (72%). The Japanese owned gas carrier fleet is the largest by far (14.6m cbm), equivalent to 18% of total fleet, and consequently the nation’s orderbook to fleet ratio is relatively low at 33%. Again, LNG units account for the majority of tonnage on order (81%). The Norwegian and Chinese owned orderbooks are more evenly split with LNG carriers accounting for 59% and 54% of units on order respectively in terms of cbm. In 2014, Chinese gas sector contracting reached record levels, a total 1.8m cbm, and their orderbook to fleet ratio is one of the highest at 202% (also reflecting the fact that their fleet is relatively limited). Elsewhere, Canadian owners have the fourth largest gas carrier orderbook (3.1m cbm), equivalent to 81% of their gas carrier fleet. The orderbook is held by one group (Teekay) and is wholly compromised of LNG units, as is 99% of the fleet.

West Meets East?

At the start of 2005, over half of the 34.5m cbm gas carrier fleet was Asian owned (55%) with European owners accounting for 25% of the fleet. Over the last decade Europeans have invested heavily in the LNG sector and, more recently, the LPG sector, and their share of the current 82.5m cbm gas carrier fleet has risen to 32%. Meanwhile, Asian owners’ share has fallen to 42%. Looking forward, the European owned fleet looks set to continue to catch up with the Asian owned fleet with Europeans holding 45% of the 34.6m cbm gas carrier orderbook versus Asian owners’ 34% share.

The recent surge in gas sector ordering has pushed the orderbook to record levels and it now totals 42% of the gas carrier fleet. Investment by European owners in the gas sector has seen their share of the fleet rise whilst Asian owners’ share has fallen. With the European owned gas carrier orderbook 35% larger than that of their Asian counterparts, the gap between the size of their gas carrier fleets is likely to close.
Source: Clarksons