- CEO cites rising decarbonization-driven demand for LNG.
- Global LNG consumption forecast to rise 60% by 2040.
- Industry set to require over 240 new LNG carriers by 2034.
Nippon Yusen KK (NYK Line), the largest shipping company in Japan, is gearing up for a significant expansion of its fleet to keep pace with the rising global demand for liquefied natural gas (LNG). The company has set its sights on boosting its LNG tanker fleet by around 50% by early 2029, reports gCaptain.
LNG as a Transition Fuel
“We need to expand,” Chief Executive Officer Takaya Soga said in an interview on Bloomberg TV’s Chief Future Officer program, citing an uptick in inquiries. “Everybody is looking at energy transformation from the viewpoint of decarbonization,” and LNG is an important part of that, he added.
Natural gas is increasingly recognised as a transitional fuel, offering a cleaner alternative to coal and serving as a reliable backup for renewable energy sources. With new projects coming online from the US to Qatar, global LNG production is expected to surge. Shell Plc predicts that LNG consumption will soar by about 60% by 2040, leading to a substantial increase in demand for shipping capacity. As reported by the International Group of LNG Importers (GIIGNL), there were 831 LNG carriers in operation at the end of last year. Shipbroker BRS estimates that an additional 241 vessels will be needed by 2034.
NYK’s Fleet Growth Strategy
Currently, NYK operates 89 LNG carriers, which include those owned and managed by the Tokyo-based company. They plan to grow this fleet to over 130 vessels by early 2029. Meanwhile, their competitor, Mitsui OSK Lines Ltd., is also looking to expand its fleet to take advantage of the increasing demand.
Impact of US-China Tensions on Shipbuilding
This year, geopolitics has also influenced the shipping sector, particularly with President Donald Trump introducing new fees on vessels that are owned, operated, or built in China when they dock in the US starting October 14. These measures aim to diminish China’s dominance in shipbuilding, although options for alternatives remain limited due to China’s extensive capacity.
“The majority of our fleet of LNG carriers are made in Korean shipyards and quite small numbers in Chinese shipyards,” said Soga, who joined Nippon Yusen in 1984. He added that almost 8% of the company’s overall fleet, which includes container ships and car carriers, has been built in China.
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Source: gCaptain
