High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
Teekay’s Research Project Manager, Nicholas Schneider notes that for the next year or so, the LNG shipping market globally will remain largely flat as new ships are delivered while existing new and existing LNG facilities try to meet their max output figures.
This year, Schneider notes that only three new liquefaction projects will come on line, which includes Papua-New Guinea LNG, Queensland Curtis LNG and the expansion of Sonatrach’s LNG plant at Arzew, Algeria.
Companies like Teekay however, which has newbuild ships on the way, are covered by pre-arranged long term contracts, while many newbuilds by others have been built on spec and will face the wrath of the LNG spot market for the rest of this year and part of 2015.
In 2015, Schneider points out that six new export projects will come on line including three large projects in Australia, two FLNG vessels (Shell and Petronas) and one export facility in Indonesia.
Post-2015, further expansion in Australia and exports from the U.S. will increase LNG output and the need for ships and between the beginning of 2015 and the end of 2017, 75 new LNG carriers will be delivered to the market, adds Schneider.
Current spot rates for LNG carriers is in the $60k range as compared to record highs in 2012 of $150k per day.
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