LNG fleet to peak in 2008 but utilisation rate falls

Excess capacity in the global fleet of LNG carriers will be at its highest this decade in 2008, due to a growing, worldwide fleet causing lower utilisation rates and it is predicted by analysts that utilisation of the LNG fleet will fall to 77.4 per cent in 2008, almost 13 percentage points lower than at the beginning of the decade, Gulf News reported on its Monday edition.

Demand for LNG tankers has deteriorated markedly as a result of a large increase in fleet supply partly caused by speculative orders for new ships.

Falling utilisation is hurting revenue for companies such as Oslo-based Bergesen Worldwide Gas ASA and Golar LNG of Hamilton, Bermuda while rising earnings for operating LNG tankers have encouraged some shipowners to order vessels without first having them assigned to particular projects.

Analysts also report that improved productivity in the existing fleet has added to the surplus capacity. The growth in the surplus is already slowing because supply disruption from Indonesia is forcing Japan, the world's largest LNG importer, to source shipments from further away, tying up ships for longer periods.

The global fleet of LNG carriers will expand 16 per cent by the first quarter of 2007, according to Oslo-based shipbrokers R.S. Platou AS.(*)