Bright future for LNG trade

The liquefied natural gas(LNG) trade and shipping outlook looks bright as more shift in favour of natural gas from coal and crude oil due to environmental concerns, New Strait Times reported.

S. Hajara, director of Shipping Corporation of India, in a recent report, said the LNG trade would nearly double over the next decade with exporters like Malaysia rapidly increasing their capacity through additional LNG trains as well as debottlenecking of their plants.

The main importers of LNG are Japan, South Korea, France and Taiwan. China and India are likely to be the new importers with European and North-American markets significantly increasing their imports. Indonesia, Algeria and Malaysia are the biggest exporters of LNG, with Qatar, UAE and Oman emerging as large exporters.

Hajara, in his logistics column in Business Line, also said the change in market conditions of growing demand and supply had led to a growth in spot-trade of LNG, estimated at seven per cent of total LNG trade, the balance being long-term contracts.

Also, a lot of cargo swapping and back hauls were expected in future particularly since the emergence of new exporters and importers would encourage two-way trade, he said.

LNG trade has shown the maximum average annual increase among all primary energy sources of about 9.5 per cent in 2001.

According to Hajara, the projected growth of LNG trade in the next decade coupled with the low ship-building prices offered by the ship-yards had led to an increase in the number of ships ordered.

Since tanker size was also increasing to achieve economy of scale, the addition to capacity was expected to be over 50 per cent, he said.

Since LNG ships enjoy a life of nearly 40 years, in view of the totally non-corrosive cargo and the sophisticated shipbuilding and cargo containment designs, there will virtually be no scrapping of LNG vessels in the near future.(*)