With the acceleration of scrapping of LNG carriers, the number of newbuilds is insufficient to keep pace with supply growth, writes Cerys Edwards
The number of newbuild LNG carriers scheduled to deliver by 2030 will not be enough to transport the planned growth in global liquefaction capacity, particularly if the retirement of older vessels accelerates compared with recent years. But the balance in the freight market will depend heavily on the configuration of LNG trade flows over the rest of the decade.
Some 234 newbuild LNG carriers are scheduled to be delivered over 2026-2030, according to data from the International Maritime Organisation (IMO), with deliveries in 2026 set to be the quickest year on record. Typically, around 1½ ships are needed to transport 1mn t of new liquefaction supply to Europe, and three ships for the equivalent journey to Asia, Capital Clean Energy Carriers chief executive Jerry Kalogiratos said at the World LNG Summit in Istanbul in December.
Applying this basic assumption, the 234 newbuild carriers could transport some 158mn t/yr of new liquefaction capacity were the supply to deliver solely to Europe. But the newbuilds provide scope for just 78mn t/yr of new loading demand should the vessels deliver to Asia, which Kalogiratos considers the more probable scenario, given that buyers in southeast Asia are likely to consume more LNG in the forthcoming years. "There definitely looks like there is going to be a shortage", he says.
Both scenarios indicate that the present LNG carrier orderbook is not large enough to accommodate the 229mn t/yr of new export capacity scheduled to come on line by 2030, judging by the projects that have already reached a final investment decision (FID). And the LNG carrier market could tighten further if more projects reach FID. Even the roughly 80mn t/yr of additional production capacity that was sanctioned this year are "not yet covered," according to David Colson, vice president at French engineering firm GTT, which supplies nearly all of the membrane containment systems used in LNG vessel tanks.
The golden age of steam coming to an end?
The LNG freight market balance over the coming years will also largely depend on the number of older vessels being scrapped, which rose sharply this year.
A record 14 steam turbines have been sold for scrap so far in 2025, up from eight in the whole of 2024 and an average of five over 2020-24. And the pace of scrapping is likely to accelerate over the next few years, as vessels roll off long-term charter agreements, Kalogiratos says. Steam turbine carriers are "obsolete" as their high boil-off costs and smaller cargo capacity sizes do not provide the "flexibility that the current LNG trading environment requires", he added.
There are 29 operational LNG carriers that are 25 years old or older, including the 137,000m³ Puteri Nilam and same-sized Al Jasra which have in recent months idled in the strait of Malacca and Bay of Brunei, according to shiptracking data from Kpler. The oldest LNG carrier still in operation is the 128,000m³ LNG Maleo, which was built in 1989 and is controlled by Indonesia's state-owned Pertamina. As well as these vessels, there are a further 47 built in 2000-2005, including 11 idling in either Malacca or Brunei Bay. These are likely to be retired by 2030, given the average age of the vessels sold for scrap in 2025 was 26, Norwegian shipping firm Flex LNG said in its third-quarter earnings call last month.
Were all 76 vessels built before 2005 scrapped by 2030, it would limit the fleet growth to a total of just 158 LNG carriers. Under the scenario outlined above this number of vessels could transport 105mn t/yr of supply to Europe and just 53mn t/yr to Asia — both far below the planned capacity buildout. The LNG carrier orderbook could still grow in the coming years however, given slots for late 2028 delivery are still available at some South Korean shipyards.
