A lack of transportation capacity will limit the potential for liquefied natural gas (LNG) to fill the energy gap as it gets worse around the world as reported by Seatrade Maritime.
Panos Mitrou, the gas expert for Lloyd’s Register (LR), issued this warning, claiming that LNG shipbuilders are already fully booked for the rest of the decade.
Recent contracts closed for roughly $250 million, an increase of about $60 million over the last deals completed at the beginning of the year. According to Clarkson data, the first half of the year saw more orders for LNG carriers than any other complete year.
According to estimations by the classification organisation, the half-dozen specialised builders in South Korea and China have a manufacturing capability of 70–80 ships each year, according to Mitrou’s opinion piece on the LR website. However, the need for liquefaction and transport in the second half of the decade might call for twice as many new boats.
Stepping up exports
Mitrou points out that two newcomers, Dalian and Jiangnan, both in China, have lately joined the four long-established LNG building yards, Daewoo, Hyundai, Samsung, and Hudong in South Korea and Hudong in China. Yangzijiang, a seventh yard, will also be joining the group.
However, several LNG companies that are stepping up exports have been caught off guard by ship supply issues. By 2025, probably earlier, Mitrou predicts that there won’t be enough LNG shipping capacity to meet the demand for transportation.
In the meanwhile, floating gas plants can give certain power-starved nations a relatively quick option to increase energy imports. However, Mitrou pointed out that converting older ships will remove more tonnage from the transportation system.
The classification society’s estimations that 400 existing LNG carriers in the 640-ship fleet are likely to fall into categories “D” or “E” of the IMO’s carbon intensity indicator, necessitating corrective action, only made matters worse, according to him. This is due in part to early diesel propulsion and a steam turbine that consumes a lot of fuel, as well as a lack of adequate boil-off management systems. Mitrou ends by stating that a perfect storm is about to develop. He claims that LNG has a great deal of potential as a transitional energy source because it is by far the cleanest hydrocarbon energy. Energy security, however, is necessary for an energy transition, “and there is very little of that in many import-dependent countries right now.”
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Source: Seatrade Maritime