MARKET ANALYSIS OF LIQUEFIED GAS INDUSTRY UPTO 2030

Market Analysis Of Liquefied Gas Industry Up To 2030

EXECUTIVE MBA IN SHIPPING AND LOGISTICS
(THE BLUE MBA)
CLASS OF 2015
Module: 03
(Final Version)
MARKET ANALYSIS OF LIQUEFIED GAS INDUSTRY UPTO 2030
By: Capt. Ayan Banerjee
Coach: Dr. Stein Erik Gronland

Capt. Ayan Banerjee Final Version Page 2 of 42

EXECUTIVE SUMMARY
Human being has always been engaged in trade to meet their needs, from barter
system to today’s e-commerce.
Energy transport is an important part of international trade. Creating opportunities to
expand the free energy related trade remains a vital part of national economies
around the world. Expanding trade opportunities helps economies grow and
increases the prosperity of people around the world
Energy-related trades are fundamentally the same as that of other products traded
globally on a daily basis. Gas Transport serves as the vital link to this energy
transport. Three - fourth of the world being covered with water, transport by sea is the
most economical solution.
In present scenario, the metamorphosis from fossil fuel to clean fuel is easily visible.
With this transformation and the recent “Energy Revolution” the gas market has
tremendous potential for future growth.


TABLE OF CONTENTS
List of Figures 5
1. Introduction 6 – 7
1.1 Objective 6
1.2 Methodology 7
1.3 Scope and Limitation 7
2. Gas Analysis 7 – 10
2.1 SWOT Analysis 8
2.2 LPG Fleet at a Glance 9
2.3 LNG Fleet at a Glance 10
2.4 Fleet Comparison 10
3. Gas Shipping Market 11 – 21
3.1 Freight Market 11 - 12
3.2 Sale and Purchase Market 12 - 13
3.3 New Building Market 14 - 20
3.4 Demolition Market 20 - 21
3.5 Market Trend 21
4. Gas Fleet Development 22
5. Builders of Gas Ships 23
6. Merchant of Gas Ships 24


7. Demand and Supply of Gas 25 – 38
7.1 LPG Importers 26
7.2 LPG Exporters 27
7.3 LNG Importers 28
7.4 LNG Exporters 29
7.5 Major Global Developments 30
7.6 Gas World Trade 31 - 34
7.7 Natural Gas – Production Forecast 35
7.8 Natural Gas – Consumption Forecast 36
7.9 Gas – Sector Consumption Forecast 37 - 38
8. Need for Gas 38 - 39
8.1 World 38
8.2 Brazil 38
8.3 China 38
8.4 Europe 38
8.5 India 39
8.6 Middle East 39
8.7 Russia 39
8.8 America 39
9. Unconventional Sources – Future Suppliers 39 – 41
9.1 Sour Gas 39
9.2 Tight Gas 39
9.3 Shale Gas 40 - 41
10. Conclusion 41
List of References 42
Appendices


LIST OF FIGURES


1. INTRODUCTION
The world is highly driven by energy. It is a part and parcel of life and the growing
economy. Energy is essential for fuelling vehicles, heating and cooling homes or
powering appliances used for daily living.
The creed for energy is constantly changing and this change is dramatically
transforming the energy landscape. The world is daily becoming energy-efficient. It
can be seen that “The Global Village” has opened its doors to innovation with the
very idea of “Making the Earth an Eco Friendly Place for the Future Generation”. Be it
Transport, Power, Industry or use of Social Amenities “Go Green” is the call.
Gas carriers are the Torch Bearers of this Green Concept. LPG / LNG is presently
used in various industries such as transport, power, petrochemical, refineries, as well
as agricultural sector and residential use there by reducing the “Global Carbon Foot
Print”. Gas, be it Natural or Petroleum is “The Second Most Important Energy Source
after Oil”
Compared to the traditional shipping, gas carriers are of the younger generation.
Emerging in the 1950s it has an immense potential to restructure the very track of the
roller coaster named “Globalization”. The potential of this so-called “New Sector”
cannot be underestimated, more so when there is a call for metamorphosis from the
fossil fuel to clean fuel.
1.1 OBJECTIVE
This assignment is an analysis of the developments in gas market, the world fleet
profile and its impact on the four shipping markets.
It analyses the potential of the gas market and its footprint on Global Energy
Conservation.
It focuses on the unconventional sources of gas extraction and subsequent
transportation, which could drive the market and cater to future demands.
It concludes on the expected growth of the gas market, looking from the present
scenario.


1.2 METHODOLOGY
This assignment is broadly split into four (04) segments.
The first segment highlight’s the world’s energy drive and the role of gas carrier in the
“Energy Revolution”.
The second segment analyses the various shipping market of gas carrier. It
emphasizes on the vital role, gas as a commodity plays in the various sectors and
worldwide energy requirement.
The third segment introduces to the unconventional sources of gas and global
development surrounding the conventional and unconventional gas market. It
focuses on the demand of gas in present scenario.
The final segment attempts to conclude on the expected growth of the gas market.
1.3 SCOPES AND LIMITATION
This assignment is focused on the development of the gas market till 2030.
This assignment has drawn information from data sources of Clarkson Shipping
Intelligence, Enerdata Global Energy Intelligence and BP Statistical Review of World
Energy.
2. GAS ANALYSIS
The emergence of these specialized vessels predominantly occurred, as “One Size
Fits All” did not work for gas cargoes. Although in the native stage they were carried
in liners or tramps often with the help of some special investments, but that gravely
compromised the standard of service and the quality of the cargo.
The vital fact of this specialized trade is not just about the ship design; rather
adapting the shipping organization to the needs of a specific customer group and
cargo flow. Setting up a specialized shipping operation is a major commitment as
these ships are often more expensive than conventional vessels. The market
demands the providers of this service to have close association with the cargo
shippers.


2.1 SWOT ANALYSIS
Strength: Gas is a clean fuel with a high supply demand potential. There is abundant
reserve to cater to the future demands atleast till 2030 using proven technology to
extract the unconventional sources.
Weakness: High capital expenditure and stringent mandatory regulations makes this
sector highly complex. It sometime lacks in long term firm contracts and also has long
implementation schedule.
Opportunity: There are plenty of opportunities in this sector with new shipping routes
opening up leading to new trade markets. There are abundant unconventional
sources and new technological advancements to harness these.
Threat: The greatest threat is the difficulty in obtaining local regulatory approval for
exploration and exploitation of these resources. Gas trade also competes on price
regime with other sources of energy. Price volatility and fiscal instability also hinders
the growth.


2.2 LPG FLEET AT A GLANCE
The graph focuses tremendous growth in the LPG fleet and the rising demand for
these ships. Over the period 1996 – 2013 the fleet developed significantly from 864
vessels in 1996 to 1240 in 2013, denoting a growth of 43.5%, whilst over the same
period, there was a total of 744 deliveries with an annual average of 41 and a total of
282 demolitions with an annual average of 16.
Order books and new building contracts placed, over the period 1996 – 2013 shows
that 867 contracts were placed with an annual average of 48, whilst over the same
period 1796 vessels were ordered with an annual average of 100. (Clarkson, 2014)


2.3 LNG FLEET AT A GLANCE
The graph focuses tremendous growth in the LNG fleet and the rising demand for
these ships.
Over the period 1996 – 2013 the fleet developed significantly from 89 vessels in 1996
to 372 in 2013, denoting a growth of 317.9%, whilst over the same period, there was
a total of 313 deliveries with an annual average of 17 and a total of 20 demolitions
with an annual average of 1.
Order books and new building contracts placed, over the period 1996 – 2013 shows
that 415 contracts were placed with an annual average of 23, whilst over the same
period 1096 vessels were ordered with an annual average of 61. (Clarkson, 2014)
2.4 FLEET COMPARISON



3. GAS SHIPPING MARKET
The foundation of the seaborne gas trade rests on four close-knit pillars / markets;
each though trading in different commodity influences the dynamics of the trade.
These markets are as stated below:
 The Freight Market
 The Sale and Purchase Market
 The New Building Market and lastly
 The Demolition Market
3.1 FREIGHT MARKET
As the name suggest, it trades in the seaborne gas transport. This is the trendsetter,
which has its impression on the other markets.
It provides freight revenue, the main source of cash for the shipowners. Freight rates
integrate supply and demand.
When there is a shortage in supply of ships the freight rates rises and stimulates the
shipowners to provide more transport and when the ships are in abundance the rates
fall forcing inefficient ships out of trade.
BALTIC EXCHANGE ASSESSMENT
0
10
20
30
40
50
60
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
RAS TANURA ‐ CHIBA ($ / T) 25.79 28.74 35.57 40.77 47.77 37.16 42.27 22.04 35.23 55.50 55.89 58.97
FULLY REFRIGERATED LPG CARRIER 44 K MT

The Baltic Exchange Rate Assessment obtained from Clarkson Shipping Intelligence
Network, for a Fully Refrigerated 44,000 MT LPG Carrier on this route highlights the
increase in rates. Over the period 2002 – 2013 the annual freight rates increased
form 25.79 USD in 2002 to 58.97 USD in 2013, denoting an annual growth of 11.69%
and an average annual rate is 40.48 USD. (Clarkson, 2014)


SAUDI ARABIA
0
100
200
300
400
500
600
700
800
900
1,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Propane ($ / Tonne) 296.75 272.92 250.08 298.58 347.92 426.83 510.33 600.17 768.33 502.92 708.75 827.08 913.75 832.50
Butane ($ / Tonne) 546.75 247.25 235.33 288.42 354.00 436.75 513.83 616.58 784.58 519.58 718.75 870.00 916.67 847.00
CONTRACT PRICE
Source: Clarkson Shipping Intelligence Network

This graph over the period 2000 – 2013 implies that price of Butane in 2000 was 250
USD more than that of Propane. Whilst over a period 2001 – 2003 Butane was
marginally cheaper compared to Propane. The prices of these two cargoes have
been gradually increasing with Butane being slightly costlier than Propane from 2004
onwards. Over the same period, price reached the peak with Propane selling at
913.75 USD / Ton, (rise of 207.9%) and Butane at 916.67 USD / Ton (rise of 67.7%)
in 2012. Prices were low in 2009 with Propane selling at 502.92 USD / Ton and
Butane at 519.58 USD / Ton.
With world economy growing stronger and regions developing, trade is gaining pace
and freight rate seems likely to rise.
The hike of 128.65% in freight rate over the period 2002 - 2013, for a 44,000 MT fully
refrigerated is an example of this. Increase in demand could lead to price rise as
evident from above graph - as of 2013 propane price increased by 180.6% since
2002 and butane price increased by 54.9%. (Clarkson, 2014)
3.2 SALE AND PURCHASE MARKET
Trading in second hand ships the niche of this market is that ships worth millions of
dollars are traded like common goods of a country market and it thrives on price
volatility. The advantage of buying a second hand ship is that it is immediately
available which in turn leverages the price, sometimes making them more costly than
new buildings. (Stopford, 2010)


GAS CARRIER SALE AT A GLANCE
Total LNG
19
12%
Total LPG
133
88%
Total LNG
Total LPG
NUMBER / SHIP TYPE
152 vessels changed ‘hands’ in this market as of 2013. Out of these 152 vessels 19
were LNG and 133 were LPG. (Clarkson, 2014)
LPG CARRIER SALE AT A GLANCE
Ethylene
14
10%
Fully Ref
52
35%
Semi Ref
38
26%
Pressurized
43
29%
Ethylene Fully Ref Semi Ref Pressurized
NUMBER / SHIP TYPE
LPG sales can be subdivided into; (Clarkson, 2014)
 Ethylene Carriers: 14
 Pressurized Vessels: 43
 Semi Refrigerated Vessels: 38
 Fully Refrigerated Vessels: 52
Gas trade being profitable, owners do not sell their ships unless it is a dire necessity
making gas carrier’s second hand market highly restricted. Looking at the huge
demand for gas ships in near future, this market could remain restricted.


3.3 NEW BUILDING MARKET
It trades in new ships. The specialty of this market is, it trades in a commodity, which
does not exist and has to be built.
The motives for a new building can be various. The need may be very specific and
nothing suitable might be available in the second hand market. Another possibility is,
ships are needed for a particular scheme with specific transportation requirement.
Some companies even have internal policies of regular replacement of their vessels.
Speculation and freight rates also play important roles in this market.
The market drawback is, ships would not be available immediately and by the time
they are available the conditions might change. (Stopford, 2010)
The process is simplified below.



LPG ORDER BOOK
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
LPG < 5K 27 20 28 21 10 12 6 4 10 14 35 46 63 74 55 57 29 16
LPG 5K ‐20K 24 18 19 18 15 16 22 14 3 17 60 59 66 66 66 70 52 45
LPG 20 ‐ 40K 8 7 9 7 6 5 7 6 8 17 18 31 29 32 19 12 4 20
LPG 40 ‐ 60K 0 0 0 0 0 0 4 7 4 1 6 6 6 3 0 0 0 0
LPG 60K & Above 5 2 4 12 11 12 11 9 10 21 41 61 51 27 15 11 13 21
NUMBER / SHIP TYPE
Lot of vessels normally find place in the order book when investors are speculative
about the freight market or have long term time charter contract with the shipper.
Over the period 1996 – 2013 the size specific orders are as per below; (Clarkson, 2014)
Sl.
No.
Vessel Size (Cubic
Meter)
Maximum Number Of
Orders Placed in any
Year
Average Number of
Annual Orders
Placed
Remarks
AA. Less than 5,000 74 in 2009 29 This is the highest order
placed for any segment,
whilst over the same
period the minimum was
4 in 2003
BB. 5,000 – 20,000 70 in 2011 36 Over the same period
the minimum was 3 in
2003.
CC. 20,000 – 40,000 32 in 2009 14 Over the same period
2012
DD. 40, 000 – 60,000 7 in 2003 2
EE. 60,000 and above 61 in 2007 19 Over the same period
1997


LNG ORDER BOOK
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
85
90
95
100
105
110
115
120
125
130
135
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
LNG < 40K 2 2 2 1 1 1 1 2 1 1 5 6 11 10 6 5 2 2
LNG 60K ‐100K 2 2 1 0 0 0 0 1 1 2 3 2 1 0 0 0 0 0
LNG 100 ‐ 140K 17 17 21 19 19 22 41 34 21 7 3 1 0 0 0 0 0 0
LNG 140K & Above 0 0 0 0 0 3 4 19 32 94 122 131 122 76 38 18 55 84
NUMBER / SHIP TYPE

This graph clearly depicts economy of scale. Over the period 1996 – 2013;
(Clarkson, 2014)
Sl.
No.
Vessel Size (Cubic
Meter)
Maximum Number Of
Orders Placed in any
Year
Average Number of
Annual Orders
Placed
Remarks
AA. Less than 40,000 11 in 2008 3 Over the same period
2003
BB. 60,000 – 100,000 3 in 2006 1
CC. 100,000 – 140,000 34 in 2003 12
DD. 140, 000 and above 131 in 2007 44 This is the highest
number of annual order
placed for any segment


LPG DELIVERIES
0
5
10
15
20
25
30
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
LPG < 5K 30 13 26 16 12 14 6 5 8 6 14 22 16 19 21 23 21 7
LPG 5K ‐20K 13 9 8 11 10 9 11 12 2 0 15 19 28 13 22 18 19 20
LPG 20 ‐ 40K 3 5 2 1 6 0 4 3 3 2 6 9 8 15 11 10 2 2
LPG 40 ‐ 60K 0 0 0 0 0 0 0 4 3 1 0 0 3 3 0 0 0 0
LPG 60K & Above 3 2 0 3 5 7 3 8 3 4 7 11 27 12 9 3 2 11
NUMBER / SHIP TYPE

The duration between order and delivery is crucial because the market may change
dramatically and vessels ordered with a hind side intention of making profit may
become a burden. This again impacts the freight rates. Over the period 1996 – 2013;
(Clarkson, 2014)
Sl.
No.
Vessel Size (Cubic
Meter)
Maximum Number Of
Deliveries in any Year
Average Number of
Vessels Delivered
Annually
Remarks
AA. Less than 5,000 30 in 1996 16 This is the highest
number of deliveries for
any segment, whilst
over the same period
2003
BB. 5,000 – 20,000 28 in 2008 13 There was no delivery
in 2005
CC. 20,000 – 40,000 11 in 2010 5 There was no delivery
in 2001
DD. 40, 000 – 60,000 4 in 2003 1
EE. 60,000 and above 27 in 2008 7 There was no delivery
in 1998


LNG DELIVERIES
0
5
10
15
20
25
30
35
40
45
50
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
LNG < 39,999 1 1 1 0 1 0 0 1 1 1 0 1 1 2 2 5 1 1
LNG 40 ‐ 59,999 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
LNG 60 ‐ 99,999 0 1 1 0 0 0 0 0 0 0 1 1 1 0 0 0 0 0
LNG 100 ‐ 139,999 6 5 3 5 13 1 9 13 15 5 2 1 0 0 0 0 0 0
LPG 140,000 & Above 0 0 0 0 0 0 1 2 5 13 25 29 50 38 25 11 2 9
NUMBER / SHIP TYPE

The LNG deliveries show a trend, which proves economy of scale, is an advantage in
the trade. This fact was also established from the order book of LNG vessels. Over
the period 1996 – 2013; (Clarkson, 2014)
Sl.
No.
Vessel Size (Cubic
Meter)
Maximum Number Of
Deliveries in any Year
Average Number
of Vessels
Delivered Annually
Remarks
AA. Less than 39,999 5 in 2011 1
BB. 60,000 – 99,999 1 in 1997, 1998, 2006,
2007 and 2008
Less than 1
CC. 100,000 – 139,999 15 in 2004 4
DD. 140,000 and above 50 in 2008 12 This is the highest
figure in any segment
although the deliveries
started only in 2002


LPG NEW BUILDING PRICE
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
LPG CARRIER 78K‐84K M3 (Fully Ref) 77.50 75.00 60.00 50.00 45.00 42.50 47.50 55.00 58.00 68.00 80.00 85.00 80.00 80.00 65.00 70.00 68.00 62.00 58.00 56.00 60.00 60.00 58.00 63.00 82.50 90.00 92.00 93.00 92.00 72.00 72.75 73.00 70.00
LPG CARRIER 60K M3 62.50 62.50 52.00 45.00 39.00 36.00 40.00 45.00 52.00 59.00 65.00 67.00 62.00 62.00 58.00 58.00 57.00 57.00 48.00 48.00 51.00 50.00 48.50 54.00 68.00 72.00 75.50 85.00 82.00 66.50 63.00 63.00 62.00
LPG CARRIER 22K‐24K M3 (Fully Ref) 45.00 42.50 35.00 30.00 27.00 26.00 26.00 27.00 39.00 46.00 52.00 55.00 48.00 48.00 43.00 43.00 42.00 42.00 34.00 33.00 35.00 34.00 30.75 34.00 46.00 51.00 51.00 53.50 53.00 46.00 45.00 46.50 41.00
LPG CARRIER 35K M3 (Fully Ref) 63.00 52.50 49.50 49.75 46.00
0
10
20
30
40
50
60
70
80
90
100
MILLION $

LNG NEW BUILDING PRICE
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
LNG CARRIER 147K M3 260 258 230 222 230 220 230 190 165 173 165 150 155 185 205 220 220 215
LNG CARRIER 160K M3 222 237 245 212 202 202 200
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
160
170
180
190
200
210
220
230
240
250
260
MILLION $

The graph establish that the price tag for a new building, under any segment is
following a sinusoidal curve - the prices rise when there is strong demand and fall
when there is abundance in supply. The pattern of the graph is symmetrical,
demonstrating a set pattern of fluctuation in price. Over the period 1980 – 2012; LNG
vessels are normally expensive than LPG vessels because of the complexity of
carriage requirement. (Clarkson, 2014)
Sl.
No.
Vessel
Size
(Cubic
Meter)
Over
the
period
Average
Annual
Price
(Million
USD)
Highest
Annual
Price
(Million
USD)
Year Remark
s
AA.
147,000 1991
-
2008
205.14 260 1991 Over the
same period
the prices
slowly
dropped till
220 M USD in
1996 and
rose to 230
M USD in
1997 and
within one
year
slammed
down to 190
M USD. The
price
lowered
every year
and in 2002
went rock
bottom at
150 M USD,
which was
almost half
the annual
price as
compared to
1991. The
price started
increasing in
the following
year and in
2007 the
price
touched 220
M USD. In
2008 the
price
reduced by
05 M USD
BB.
160,000 2006
-
2012
217 245 2008 Over the said
period the
price is
slowly
declining
and in 2012
the annual
price was
200 M USD. It
means in
four years
the annual
price fell by
45 M USD.
Sl. No.
Vessel
Size
(Cubic
Meter)
Highest
Price in
any Year
(Million
USD)
Year Remarks
AA.
22,000
–
24,000
Fully
Ref
55 1991
BB.
35,000
Fully
Ref
63 2008 These vessels
were not ordered
before 2008. This
indicated that
there is a growing
prospect for this
segment.
CC.
60,000
Fully
Ref
85 2007
DD.
78,000
–
84,000
Fully
Ref
93 2007



Fully Refrigerated LPG Sector
Over the period 1980 – 2012, the price for a 22,000 – 24,000 cubic meters vessel
dropped by 8.9%, whereas over the same period it dropped by 9.6% for a 78,000
cubic meters vessel.
Over the period 2008 – 2012 the price for a 35,000 cubic meters vessel dropped by
25%. (Clarkson, 2014)
LNG Sector
Over the period 1991 – 2008, the price for a 147,000 cubic meters vessel dropped by
17%, whereas over the period 2006 – 2012 it dropped by 9.9% for a 160,000 cubic
meters vessel. (Clarkson, 2014)
Thus gas ships becoming cheaper implies that future demand for these ships can be
well accommodated and economy of scale could prevail.
3.4 DEMOLITION MARKET
This market also referred to as ‘Recycling Market’ deals in ships for scrapping and its
importance cannot be underestimated. It plays a vital role in maintaining the market
equilibrium. It depends on various factors such as age, technical obsolescence,
scrap price, current earnings and market expectations.
Being a business decision, it depends on owner’s future operating profitability of the
vessel and his financial position. It occurs when the industry’s reserves of cash and
optimism runs down and owners predicts that future earnings from the ship could be
less than the cost of repairing and operating it. (Stopford, 2010)


DEMOLITION
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total No. Of LPG Demolition 9 12 10 9 11 9 24 20 19 9 6 20 20 30 27 19 18 10
Total No. Of LNG Demolition 0 1 0 0 1 0 0 0 0 0 0 1 4 0 2 3 4 4
9
12
10
9
11
9
24
20
19
9
6
20 20
30
27
19
18
10
0
1
0 0
1
0 0 0 0 0 0
1
4
0
2
3
4 4
0
5
10
15
20
25
30
YEAR WISE COMPARISION
Over the period 1996 – 2013; (Clarkson, 2014)
Sl.
No.
Vessel
Type
Maximum Number
Of Vessel
Scrapped in any
Year
Total Number
of Vessels
Scrapped
Remarks
AA. LPG 30 in 2009 282 Comparing the yearly average number of
LPG and LNG vessels scrapped, it can be
seen that on an average 16 LPG vessels
were scrapped as compared to 1 LNG
vessel.
BB. LNG 04 in 2008, 2012
and 2013
20
Thus it establishes that as the return of Asset (ROA) is high, owners could be
reluctant to scrap ships.
3.5 MARKET TREND
With an insight into these markets it can be deduced that freight rates seems likely to
increase along with cargo price.
As second hand sale is highly restricted, huge demands could dictate new buildings.
Technological innovations and cheaper price could affect the economy of scale.
A comparatively young fleet having high return of asset could result in few
demolitions.


4. GAS FLEET DEVELOPMENT
FLEET DEVELOPMENT
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
LPG Fleet Development (Million DWT) 9.21 9.59 9.87 10.01 10.27 10.68 11.10 10.93 11.32 11.33 11.49 12.05 12.63 14.12 14.68 15.13 15.35 16.11
LNG Fleet Development (Million DWT) 5.23 5.68 6.06 6.33 6.7 7.69 7.76 8.53 9.67 11.22 12.65 14.87 17.5 22.2 25.89 28.16 29.01 29.53
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
MILLION DWT

With reference to the deadweight, it is evident that over a period 1996 – 2013 the
total deadweight for LPG carrier increased from 9.21 Million in 1996 to 16.11 million
in 2013 denoting a growth of 74.9%
Over the same period LNG carrier shows a dramatic growth from 5.23 Million in 1996
to 29.53 Million in 2013 denoting a growth of 464.6%
Comparing the difference in growth over the said period it can be established that
LPG carriers have grown by 6.9 Million whereas LNG carriers have grown by 24.3
Million. (Clarkson, 2014)
Thus growth rates indicate a huge demand for gas ships with LNG carriers growing
252.2% more than LPG carriers.


5. BUILDERS OF GAS SHIPS

With 28 gas carrier yards worldwide, only 7 are exclusive. Among them 2 are in
Japan and the rest in Brazil, China, Netherlands, Poland and South Korea.
(Clarkson, 2014)
Looking at the growing demand it is presumed that either new yards could open up or
remaining 75% yards could become exclusive, in future.



6. MERCHANTS OF GAS SHIPS

As evident, most of the big players have ordered vessels to cater to the future
demand. As of 2013 BW Gas owns maximum vessels, comprising a fleet of 44
vessels among which 37 are in service while the rest 7 are under construction.
(Clarkson, 2014)
However, these owners operate as a pool and are actually a syndicate of many
companies.
With future growth in trade, existing syndicates could grow stronger and new
syndicates could emerge.


7. DEMANDS AND SUPPLY OF GAS
LPG supplies feed stock gases to chemical industry. Three main gases namely
Propane, Ethane and Butane caters to the transportation, residential, commercial
and petrochemical sector.
LNG is the third vital energy source transported by sea. It caters to power,
transportation and residential sector. It produces hydrogen, is a feedstock for
production of ammonia. It is also used in the manufacture of fabrics, glass, steel,
plastics and paints.
Thus there is enormous demand for gas, worldwide.
Source: BP Statistical Review of World Energy 2013
Major LNG Trade Movement in 2012 (Billion Cubic Meters)



7.1 LPG IMPORTERS
Over the period 2000 – 2013 in addition to the OECD members there are 12 major
importers of LPG. In 2012 OECD members imported the highest quantity, touching
43.96 Million Tonnes and in 2013 the amount imported by them is 43.42 Million
Tonnes. The highlighted cells indicate maximum quantity imported by a certain
country over the said period. (Clarkson, 2014)
Over the same period Asia is second largest importer with its requirement slowly
rising over the years and is closely followed by Europe.


7.2 LPG EXPORTERS
Over the period 2000 – 2013 there are 3 major exporters of LPG with EU / Norway
being the leading exporter. In 2006 EU / Norway exported the highest quantity,
touching 13.72 Million Tonnes and in 2013 the amount exported is 11.52 Million
Tonnes.
The highlighted cells indicate maximum quantity exported by a certain country over
the said period. (Clarkson, 2014)

Over the same period export of LPG from Australia is slowly decreasing, while it is
slowly increasing from Canada.
This indicates that there is a huge demand for LPG worldwide leading to a huge
demand for gas ships in future.


7.3 LNG IMPORTERS
Over the period 2000 – 2012 there are 15 major importers of LNG, Asia being the
prime one. In 2012 Asia imported record time highest of 365.06 Million cubic meters
of LNG. The highlighted cells indicate maximum quantity imported by a certain
country over the said period. (Clarkson, 2014)

Over the same period Japan is the second largest importer with its rising
requirements, being closely followed by Europe.


7.4 LNG EXPORTERS
Over the period 2000 – 2012 there are 12 major exporters of LNG, Middle East being
prime one. In 2011 Middle East exported record time highest of 209.73 Million cubic
meters of LNG. The highlighted cells indicate maximum quantity exported by a
certain country / region over the said period. (Clarkson, 2014)

Over the same period Asia – Pacific is second largest exporter and is fascinating
This indicates the huge demand for LNG worldwide and need for LNG vessels.


7.5 MAJOR GLOBAL DEVELOPMENTS
It is estimated that 22% of world’s undiscovered conventional oil and natural gas
resources are in the Arctic region. There is enormous potential and with the opening
up of new route gas trade movement could grow in future. (RIGZONE, 2011)
Singapore LNG Corporation (SLNG) is clearly leveraging its strategic location to
become Asia’s primary gas marketing hub and is the first LNG terminal in Asia for
importing and re-exporting LNG from multiple suppliers.
Shell is planning to build the world’s first floating LNG platform. The 600,000 (T)
behemoth – the world’s biggest ship will be sited off the coast of Australia.
(Summers, 2011)
Recently Cyprus and Total have signed a MOU to build a LNG plant. Similarly a new
LNG import terminal is approved in Fujairah. Whereas Chevron signed 10 Billion
USD Shale Gas Agreement with Ukraine. Argentina National Gas Company selected
BP to supply 80% of its LNG needs. China has set 5 years plans for Shale gas
segment. (Enerdata Daily Review of Energy, 2014)
The Finish Government is supporting in the investment in LNG terminals and US
Department of Energy has approved applications to export LNG to signatories of
Free Trade Agreement. GLNG and APLNG agreed on building joint LNG
infrastructures in Australia. (Enerdata Daily Review of Energy, 2014)



7.6 GAS WORLD TRADE
EUROPE’S SEABORNE LPG TRADE
0
5
10
15
20
25
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Europe's LPG Import (Million Tonnes) 15.01 14.18 13.57 14.14 15.82 17.01 16.96 16.81 18.01 16.91 16.32 17.80 17.80 20.84
EU / Norway LPG Export (Million Tonnes) 6.79 6.71 7.74 12.46 12.40 13.65 13.72 11.98 12.04 11.57 10.81 11.02 12.40 11.52
IMPORT & EXPORT
Over the period 2000 – 2013 European market shows increasing demand for LPG.
(Clarkson, 2014)
Sl. No. Increase In Import
(Million Tonnes)
Highest Export in any
Year
(Million Tonnes)
Remarks
AA. 5.83 13.72 in 2006 Export is slowly reducing as evident and
home production is not matching the vast
consumption.


EUROPE’S SEABORNE LNG TRADE
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
LNG Import (Million Cubic Meter) 54.97 55.20 65.92 66.31 65.15 78.71 95.32 87.94 93.27 114.30 142.40 145.51 107.99
LNG Export (Million Cubic Meter) 0.00 0.00 0.00 0.00 0.95 0.38 0.23 0.28 4.19 16.66 29.74 31.58 31.49
IMPORT & EXPORT

Over the period 2000 – 2012 there had been an increasing demand for LNG in
European market. (Clarkson, 2014)
Sl.
No.
Highest Import
in any Year
(Million Tonnes)
Total Quantity
Imported
(Million Tonnes)
Highest Export in
any Year
(Million Tonnes)
Total Quantity
Exported
(Million Tonnes)
Remarks
AA. 145.51 in 2011 1172.99 31.58 in 2011 115.50 Although import is
reducing, Europe still
depends heavily on it
to cater its
consumption. It started
exporting from 2004.


CHINA’S SEABORNE LIQUID GAS TRADE
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Liquid Gas Import (Million Tonnes) 5.54 4.81 4.88 6.25 6.38 6.40 6.15 6.05 6.97 5.94 9.69 12.63 15.71 18.20 14.12
Liquid Gas Export (Million Tonnes) 0.08 0.01 0.00 0.04 0.01 0.02 0.01 0.13 0.33 0.66 0.82 0.89 1.16 1.26 0.82
IMPORT & EXPORT

Over the period 1999 – 2013, there had been a steady rise in demand for gas in
Chinese market. From 2009 – 2012 quantity of gas imported increased steadily,
whereby it imported 18.20 Million Tonnes of liquefied gas in 2012.
Howsoever in 2013 there is a drop in import to 14.12 Million Tonnes (Clarkson, 2014)
Sl.
No.
Highest Import
in any Year
(Million Tonnes)
Total Quantity
Imported
(Million Tonnes)
Highest Export
in any Year
(Million Tonnes)
Total Quantity
Exported
(Million Tonnes)
Remarks
AA. 18.20 in 2012 129.72
(Yearly Average:
8.65)
1.26 in 2012 6.24
(Yearly
Average: 0.42)
China is importing 21
times more
compared to its
export.


USA LNG TRADE
0
5
10
15
20
25
30
35
40
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
LNG Import (Million Cubic Meter) 10.71 11.13 10.55 23.01 29.55 29.12 26.13 35.72 16.06 20.96 19.95 15.96 8.04
LNG Export (Million Cubic Meter) 2.98 3.00 2.90 2.81 2.92 2.97 2.77 2.12 1.73 1.32 2.45 3.09 0.41
IMPORT & EXPORT

Over the period 2000 – 2012, US LNG import had been versatile and since 2009
quantity of LNG imported is slowly decreasing and amount of LNG imported in 2012
is 8.04 Million Cubic Meters (Clarkson, 2014)
Sl.
No.
Highest Import
in any Year
(Million Cubic
Meters)
Total Quantity
Imported
(Million Cubic
Meters)
Highest Export
in any Year
(Million Cubic
Meters)
Total Quantity
Exported
(Million Cubic
Meters)
Remarks
AA. 35.72 in 2007 256.89
(Yearly Average:
19.76)
3.09 in 2011 31.47
(Yearly
Average: 2.42)
Thus US is slowly
becoming self-
sufficient and over
the years could
become a leading
exporter.



7.7 NATURAL GAS – PRODUCTION FORECAST
NATURAL GAS PRODUCTION AT A GLANCE
0
50
100
150
200
250
300
350
400
450
500
550
600
650
700
750
800
850
900
950
1,000
1,050
1,100
1,150
1990 1995 2000 2005 2010 2011 2015 2020 2025 2030
1990 1995 2000 2005 2010 2011 2015 2020 2025 2030
North America 584.0 651.7 694.0 678.5 743.4 784.0 803.6 893.6 955.0 983.3
South & Central America 52.3 68.0 90.2 124.8 146.5 150.9 172.0 188.7 208.8 232.9
Europe & Eurasia 865.1 789.2 843.0 926.1 924.2 932.7 994.4 1001.5 1054.4 1110.0
Middle East 91.2 134.6 187.3 287.9 425.1 473.5 575.0 631.8 717.2 794.1
Africa 61.9 76.7 117.3 156.9 192.2 182.4 213.5 222.2 277.7 350.7
Asia Pacific 135.8 190.4 244.9 326.8 435.2 431.2 512.2 655.8 738.8 809.8
MILLION TONNES OIL EQUIVALENT
Source: BP Energy Outlook 2030
Year North America 5 Yearly Growth South & Central America 5 Yearly Growth Europe & Eurasia 5 Yearly Growth Middle East 5 Yearly Growth Africa 5 Yearly Growth Asia Pacific 5 Yearly Growth
1990 584.0 52.3 865.1 91.2 61.9 135.8
1995 651.7 67.7 68.0 15.7 789.2 ‐75.9 134.6 43.4 76.7 14.8 190.4 54.6
2000 694.0 42.3 90.2 22.2 843.0 53.8 187.3 52.7 117.3 40.6 244.9 54.5
2005 678.5 ‐15.5 124.8 34.6 926.1 83.1 287.9 100.6 156.9 39.6 326.8 81.9
2010 743.4 64.9 146.5 21.7 924.2 ‐1.9 425.1 137.2 192.2 35.3 435.2 108.4
2011 784.0 40.6 150.9 4.4 932.7 8.5 473.5 48.4 182.4 ‐9.8 431.2 ‐4
2015 803.6 19.6 172.0 21.1 994.4 61.7 575.0 101.5 213.5 31.1 512.2 81
2020 893.6 90.0 188.7 16.7 1001.5 7.1 631.8 56.8 222.2 8.7 655.8 143.6
2025 955.0 61.4 208.8 20.1 1054.4 52.9 717.2 85.4 277.7 55.5 738.8 83
2030 983.3 28.3 232.9 24.1 1110.0 55.6 794.1 76.9 350.7 73.0 809.8 71

Table shows future estimate of natural gas production till 2030 in terms of million
Tonnes of oil equivalents. The producers, taken into account are as stated below:
 North America
 South and Central America
 Europe and Eurasia
 Middle East
 Africa
 Asia Pacific
It is evident that Europe and Eurasia could lead in terms of LNG Production. Five
yearly growth rate of production could be 44.3 Million Tonnes (Oil Equivalent) from
2015 to 2030.
Over the same period, comparing only rate of production it is found that Asia Pacific
could lead with a five yearly average growth rate of 94.65 Million Tonnes (Oil
Equivalent). (BP Energy Outlook, 2030)


7.8 NATURAL GAS – CONSUMPTION FORECAST
NATURAL GAS CONSUMPTION AT A GLANCE
0
50
100
150
200
250
300
350
400
450
500
550
600
650
700
750
800
850
900
950
1,000
1,050
1,100
1,150
1,200
1990 1995 2000 2005 2010 2011 2015 2020 2025 2030
1990 1995 2000 2005 2010 2011 2015 2020 2025 2030
North America 579.3 673.8 720.8 707.0 757.9 782.4 815.6 862.4 885.3 906.8
South & Central America 52.0 67.6 86.4 110.6 135.2 139.1 161.2 183.5 214.1 241.7
Europe & Eurasia 876.3 823.4 884.3 995.3 1012.2 991.0 1068.2 1103.9 1131.1 1165.3
Middle East 86.1 128.1 168.1 251.3 339.5 362.8 456.3 510.4 585.7 670.0
Africa 35.7 42.7 52.6 74.7 96.2 98.8 115.3 123.1 143.8 167.9
Asia Pacific 139.1 191.4 261.7 358.6 502.1 531.5 684.4 850.0 977.5 1099.9

Year North America 5 Yearly Growth South & Central America 5 Yearly Growth Europe & Eurasia 5 Yearly Growth Middle East 5 Yearly Growth Africa 5 Yearly Growth Asia Pacific 5 Yearly Growth
1990 579.3 52.0 876.3 86.1 35.7 139.1
1995 673.8 94.5 67.6 15.6 823.4 ‐52.9 128.1 42.0 42.7 7.0 191.4 52.3
2000 720.8 47.0 86.4 18.8 884.3 60.9 168.1 40.0 52.6 9.9 261.7 70.3
2005 707.0 ‐13.8 110.6 24.2 995.3 111.0 251.3 83.2 74.7 22.1 358.6 96.9
2010 757.9 50.9 135.2 24.6 1012.2 16.9 339.5 88.2 96.2 21.5 502.1 143.5
2011 782.4 24.5 139.1 3.9 991.0 ‐21.2 362.8 23.3 98.8 2.6 531.5 29.4
2015 815.6 33.2 161.2 22.1 1068.2 77.2 456.3 93.5 115.3 16.5 684.4 152.9
2020 862.4 46.8 183.5 22.3 1103.9 35.7 510.4 54.1 123.1 7.8 850.0 165.6
2025 885.3 22.9 214.1 30.6 1131.1 27.2 585.7 75.3 143.8 20.7 977.5 127.5
2030 906.8 21.5 241.7 27.6 1165.3 34.2 670.0 84.3 167.9 24.1 1099.9 122.4

Table shows future estimate of natural gas consumption till 2030 in terms of
million Tonnes of oil equivalents. The consumers, taken into account are as stated
below:
 North America
 South and Central America
 Europe and Eurasia
 Middle East
 Africa
 Asia Pacific
It can be seen that Europe and Eurasia could lead in terms of LNG Consumption.
Five yearly growth rate of consumption could be 43.6 Million Tonnes (Oil
Equivalent) from 2015 to 2030.
Over the same period, comparing only rate of consumption it is found that Asia
Pacific could lead with an average five yearly growth rate of 142.1 Million Tonnes (Oil
Equivalent). (BP Energy Outlook, 2030)


7.9 GAS – SECTOR CONSUMPTION FORECAST
GAS CONSUMPTION BY SECTOR
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
1990 1995 2000 2005 2010 2011 2015 2020 2025 2030
1990 1995 2000 2005 2010 2011 2015 2020 2025 2030
Transport 1.7 3.2 4.3 12.1 32.9 36.7 54.5 69.6 95.1 135.6
Power 471.3 522.5 654.6 846.7 1039.1 1064.4 1201.6 1343.9 1480.1 1590.7
Industry 811.1 867.7 932.3 1001.6 1110.9 1155.9 1327.5 1464.3 1564.0 1663.7
Others 484.5 534.8 583.7 638.5 662.4 652.7 727.7 766.4 810.2 873.4

Year Transport 5 Yearly Growth Power 5 Yearly Growth2 Industry 5 Yearly Growth3 Others 5 Yearly Growth
1990 1.7 471.3 811.1 484.5
1995 3.2 1.5 522.5 51.2 867.7 56.6 534.8 383.2
2000 4.3 1.1 654.6 132.1 932.3 64.6 583.7 397.5
2005 12.1 7.8 846.7 192.1 1001.6 69.3 638.5 417.9
2010 32.9 20.8 1039.1 192.4 1110.9 109.3 662.4 472.4
2011 36.7 3.8 1064.4 25.3 1155.9 45.0 652.7 493.5
2015 54.5 17.8 1201.6 137.2 1327.5 171.6 727.7 674.8
2020 69.6 15.1 1343.9 142.3 1464.3 136.8 766.4 736.6
2025 95.1 25.5 1480.1 136.2 1564.0 99.7 810.2 797.6
2030 135.6 40.5 1590.7 110.6 1663.7 99.7 873.4 853.5

Previous table shows future estimate of gas consumption in various sectors till 2030
in terms of million Tonnes of oil equivalents. The following are taken into account:
 Transport
 Power
 Industry
 Others
As evident over the period 1990 – 2030 consumption of gas could grow steadily
across all the sectors. (BP Energy Outlook, 2030)
A close look at individual sectors shows the following;


As seen, transportation industry could have an increase in energy demand by more
than 300% from 2010 to 2030
Future prospects over the same period show that Industry could lead in terms of LNG
Consumption. Five yearly growth rate of consumption could be 131.6 Million Tonnes
(Oil Equivalent) from 2015 to 2030.
Comparing five yearly rate of consumption it is established that other sectors leads
with an average five yearly growth rate of 765.6 Million Tonnes (Oil Equivalent). (BP
Energy Outlook, 2030)
8. NEED FOR GAS
8.1 WORLD
Natural gas could be the fastest growing clean fuel, could be used 14% more by
2030 and Europe could remain world’s largest importer. Non-OECD countries could
account for 76% of the rise in gas demand and 74% of output growth. LNG supply
could grow twice as fast as total output and Australia could overtake Qatar as the top
LNG supplier. (BP Energy Outlook, 2030)
8.2 BRAZIL
Gas production could increase by 146% and consumption by 137% and could
replace coal and hydro energy in power generation. Net natural gas imports could
double despite strong output growth. (BP Energy Outlook, 2030)
8.3 CHINA
Gas production could increase by 182% and it could becomes second largest gas
consumer by 2027. (BP Energy Outlook, 2030)
8.4 EUROPE
Gas demand could rise by 26% and could curtail CO2 emission by more than 12%
and by 2030 Europe could become largest net importer of natural gas whereby gas
production could drop by 21% and gas import could rise by 74%. (BP Energy Outlook,
2030)


8.5 INDIA
India could become increasingly import dependent despite increased production. Gas
production could increase by 16% and consumption by 110% and gas demand could
rise by 101%. (BP Energy Outlook, 2030)
8.6 MIDDLE EAST
Gas production could increase by 68% and gas could grow from 27% to 34% in
2030. It could remain as a large exporter and could grow by 10% with gas gaining
8%. Gas consumption could rise from 49% to 55% in 2030. Gas export could account
for 15% in 2030. (BP Energy Outlook, 2030)
8.7 RUSSIA
It could remain largest net exporter of natural gas, providing 6% of global demand by
2030. Gas demand could rise by 8% and could account for 30% of energy demand
growth. Gas could remain the leading fuel but falls from 56% today to 52% in 2030.
(BP Energy Outlook, 2030)
8.8 AMERICA
99% of energy demand could be supplied by domestic sources by 2030. Gas
production could rise by 32% and consumption could grow by 14%. US could be self-
sufficient in natural gas and could be the largest producer of natural gas in the world.
Natural gas consumption could increase from 25% to 31% and could be the leading
fuel in energy consumption by 2026. (BP Energy Outlook, 2030)
9. UNCONVENTIONAL SOURCES – FUTURE SUPPLIERS
9.1 SOUR GAS
In some areas, natural gas occurs mixed with higher levels of Sulphur, creating
hydrogen sulfide (H2S), a corrosive gas. This is “sour gas” and it requires additional
processing to purify it.
9.2 TIGHT GAS
Tight gas refers to natural gas reservoirs locked in extraordinarily impermeable, hard
rock, making the underground formation extremely "tight." It can also be trapped in
sandstone or limestone formations that are a typically impermeable or nonporous.


9.3 SHALE GAS
Shale gas describes a field in which natural gas accumulation is locked in tiny
bubble-like pockets within layered sedimentary rock such as shale.
For decades geologists knew that shale gas existed deep beneath many areas of
North American continent, recently, operational efficiencies and proven technology
have come together to make shale gas both accessible and economically
competitive.
Dramatic rise in shale gas extraction and tight gas revolution became possible
because of open access, sound policies, stable property rights and good
engineering.
The speed at which this enormous resource can be brought in the market depends
on practicability of cost involved in initial infrastructure.
The gradual rise of shale gas is the single major event in the Energy world having an
ever lasting impression. Shale gas could add more than 40% of world’s gas volume
in near future.
In terms of technically recoverable shale gas resources, China rules the world.
Presently from various researches conducted worldwide, the top fifteen players in
shale gas reserves are tabulated below.


So it seems very likely that shale gas could play an increasingly important role in
years to come and could influence the market. (World Shale Gas Reserve)
10. CONCLUSION
With growing world economy, volume of trade is increasing, resulting in opening up
of new terminals, sea routes and sources of gas.
Increase in demand is resulting in price rise whereby propane and butane price is
increasing by 180.6% and 54.9% respectively since 2002. Marine transportation
being the most economical solution, gas fleet seems likely to be in huge demand with
LNG growing 252.2% more than LPG, in the present scenario.
Although the age profile of world gas fleet is relatively young, still it is insufficient to
handle the enormous rise in future demands. As second hand sale is highly
restricted, this huge demand could dictate new buildings and economy of scale could
prevail.
Due to profitability in gas trade (Annual growth rate of freight being 11.69%) and the
price of ships becoming cheaper (Price of a 35,000 m3
fully refrigerated vessel
dropped by 25%) owners seems likely to be reluctant in scrapping ships due to high
return of assets and could be interested in investing in gas ships thus making the
existing syndicate stronger.
Thus it seems very likely that unconventional sources could play a vital role (Shale
gas could add more than 40% of world’s gas volume) and influence future shipping
market.


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