Global LNG fleet to shrink after 2024: Flex

The global fleet of LNG carriers will start to shrink by the mid-2020s in the absence of new orders and as older vessels are scrapped, according to Norwegian shipowner Flex LNG.

Availability could peak as early as 2024, based on the current order book and timetable for the dismantling of older vessels. More than 100 LNG carriers — mostly with a two-stroke propulsion system — have been ordered and are due to be delivered by 2023. But further investment might be needed to offset the gradual decline in steam-turbine carriers, which still make up 45pc of the global fleet. The 200-strong fleet of steam-turbine LNG carriers is likely to all but disappear by 2045, according to Flex.

Boil-off accounts for some 51pc of transportation costs for steam-turbine vessels, compared with 31pc for tri-fuel diesel electric (TFDE) vessels and 23pc for vessels with a two-stroke propulsion engine, according to the company.

The projected reduction in tonnage availability comes against expectations that global LNG trade will double by 2035 from 2018 levels — even in the event of a rapid decarbonisation of energy demand — the company said, citing the BP Energy Outlook released this week.

Flex LNG started building a fleet of LNG carriers in 2018. It has taken delivery of 10 vessels, with three more to follow by the end of next year. Of the vessels already in operation, seven are under term charters at fixed or variable rates, with three more available on the spot market (see table).

By Antonio Peciccia

Global LNG fleet and orderbook no.of ships