According to Exxon Mobil, the demand for natural gas is expected to double by 2040; more than for any other kind of fuel.
Declining prices of natural gas means we could witness a three-way battle between coal, crude and natural gas to become the primary choice of fuel. Although, not as cheap as coal and crude oil, natural gas is a clean fuel and fits the global consensus of reducing the global carbon footprint.
The surge in demand for natural gas is likely to have a favourable impact on the midstream segment of the oil and gas industry as the produced gas would be required to be shipped from production areas to the demand centers across the world. LNG vessels are the prime choice for dealing with outbound gas transportation across oceans, and can (demand) experience strong tailwinds.
A huge wave of upcoming LNG projects across Oceania and North America will certainly augment the demand for LNG Carriers. Shale gas boom in the US has completely upturned the natural gas supply scenario. The US which used to be one of the largest buyers of super chilled fuel is now converting its re-gasification terminals into exporting (Liquefaction) terminals. Four LNG export terminals namely Corpus Christi, Cameron LNG Terminal, Cove Point and Freeport, with a combined capacity of more than 6 billion ft3 per day, are under construction and are expected to be online before 2021. Once complete, these projects will certainly boost the demand for LNG carriers.
Similarly, several LNG projects are expected to come online before 2020 in Australia, which will make the country one of the largest LNG producers in the world. It is to be noted that there is a direct and a close link between the demand for natural gas and LNG carriers.
Thus any factor enhancing demand or production of natural gas is bound to augment the demand for gas carriers as well. Despite a multitude of positive factors restraints such as dwindling Chinese and European Economy (leading to less consumption of primary energy), restart of nuclear reactors in Japan (indicating a possible switch back to nuclear fuel for power generation) and regular cost overruns amid dwindling oil and gas prices leading to a delay in scheduled start date of LNG projects could dampen or delay the demand for LNG carriers.
Read the article online at: https://www.lngindustry.com/liquefaction/11102017/global-and-us-lng-carrier-market-forecasts/