October 10, 2019
Positive developments in the large LNG sector are expected to continue throughout the rest of 2019 and into 2020, according to a report from VesselsValue.
The sector is being driven by increasing demand as more countries prioritize LNG as an energy source, replacing oil and coal, combined with increasing supply as more projects continue to come online.
China is at the forefront of this growth and is emerging as the largest source of new LNG demand growth and second largest importer of LNG, VesselsValue noted, adding that China’s natural gas consumption has surged amid a gasification program and plan that is shifting millions of households and a large number of factories to natural gas from coal.
Referring to ownership of large LNG assets, VesselsValue said that Greece and Japan dominate in terms of USD value. Greece has recently overtaken Japan as the top owning country, ordering a large number of vessels since 2018.
“However, we have seen China emerge in the LNG market owning a total of USD 5.9 billion of large LNG assets, which equates to about 13% of the top 5 owning countries,” the platform added.
China currently owns a total of 45 vessels, with over half of them being younger than 2 years including newbuilds, so alongside the Greeks, they own a young fleet benefiting in the future market.
ICBC own the highest value of the fleet with their 10 vessels with a value of over USD 1.7 billion.
In terms of yards, South Korea has always been the favorable country to build LNG vessels at and with the mega merger of HHI and DSME, China began to feel the pressure. However, a shift is taking place as the gas market is starting to invest more money into Chinese yards.
Out of the 127 vessels due to go online in the next 3 years, 17% will be built at a Chinese yard, 75% in South Korea and the rest in Japan.
China is starting to compete with South Korea for these high net assets and “over the next few years we expect the Chinese to increase competition with South Korea / Japan and the number of gas newbuilds in Chinese yards to increase dramatically,” the platform informed, adding that China is making a move in the LNG market and taking advantage of the sector development.
Source: (World Maritime News)