Tanker trade to benefit from growing LNG demand

In 2003, global flows of LNG amounted to nearly 750 billion cubic metres, of which 20 per cent is carried aboard ships and the remainder by pipeline, according to the French research body, Institut Francais du Petrole (IFP) was quoted by Singapore's Business Times.

In an industry report, the institute forecast an annual expansion in LNG trade of 3.5 per cent through 2020, with the LNG tanker trade 'emerging as the winner of this dynamic'.

By 2020, LNG carried by ships is expected to reach 430 billion cubic metres, or about 32 per cent of world LNG trade. Asian demand for LNG alone will swell to 150 billion cubic metres by 2010 and 220 billion cubic metres by 2020. Currently, Japan and South Korea are the largest Asian users of LNG, with one LNG carrier entering Tokyo Bay nearly every 20 hours.

India and China in particular will swell the ranks of liquefied gas importers following the signing last year of a 20-year deal to buy LNG from Australia. The IFP also noted that in the longer term, receiving terminals could be built in Singapore, Indonesia and the Philippines.

Malaysia, Brunei, Indonesia and Australia currently supply nearly 70 per cent of the region's demand, while the remainder comes from the Middle East countries of Qatar, Oman and the United Arab Emirates.

The IFP notes that these suppliers will be joined by other sources like Russia, from its Sakhalin project.

It said the major market upheaval that will result from the industry's rapid expansion globally will result in a shift away from destination clauses to the development of a spot market which could comprise 20 per cent of the LNG trade by 2020.(*)