Increase in LNG carrier Demand Hiding by the Oversupply Issue

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The recent focus on LNG market oversupply and the continuous growth in LNG export capacity is masking the continuous increase in LNG demand.
That is according to Mark Adeosun. Analyst. Westwood Global Energy Group. in analysis which looks at where demand is headed in the period up to 2021.
“Whilst increasing demand has been driven by traditional demand hubs. such as China and India. several new LNG importers including Poland. Jordan. Malta. and Pakistan have also emerged in the last two years.“ Mr Adeosun said.
Diversification
This is part of a trend of more countries seeking to utilise LNG to diversify their gas supply and improve power generation.
Westwood expects this trend to continue. as 16 additional countries. including Bangladesh. India. Russia. and Sri Lanka. commission their first floating import units (FSRUs) over the 2017-2021 period. These units are expected to unlock new import markets by providing a quick and cost-effective solution to the increasing local gas demand.
LNG carrier growth over the past decade has been synonymous with the growth in global LNG import and export capacity.
However. in recent years the increase in LNG cargos hitting the market has led to an oversupply problem. causing a significant decline in LNG spot prices. This oversupply has heavily impacted the LNG carrier market resulting in appetite for newbuild carriers to dwindle.
In 2016. orders for newbuild LNG carriers amounted to only six units. a 92% decline compared to the number of LNG carriers ordered in 2014.
Newbuilds
Over 219 newbuild LNG carriers are expected to be delivered over the 2017-2021 period. including 17 new units that have been ordered in since 2017. The expected deliveries also include 92 new-build LNG carriers. which are yet to be ordered.
Whilst Westwood still expects oversupply to persist beyond the forecast period. it said continuous pro-gas energy policies in Asia in combination with expanding LNG trade routes are expected to support the demand for newbuild LNG carriers.