Teekay LNG Partners issue Market Insights providing updates on the LNG Market. In this quarter’s LNG Market Update, Nicholas Schneider gives an overview of the globla LNG trade, fleet and charter rates.
LNG Trade
Global LNG import growth has been moderate. Global LNG imports increased 1% in 2014 to 239 million tonnes. During Q1-2015, global LNG imports were 2.4% higher than during the same quarter last year. Europe, Japan and Taiwan saw the largest increase in year-over-year LNG imports in Q1-2015, mostly due to lower LNG prices and new LNG supply in the Pacific region. However, increases in Europe and parts of Asia were largely offset by declines in South Korea and China. Mild winter weather across Asia resulted in high LNG inventories, reducing import demand.
World LNG Fleet
The LNG carrier fleet now consists of 384 vessels and 137 newbuildings on order, not including regas vessels and small LNG carriers. Contracting for newbuild LNG vessels has slowed in 2015. After an all-time high of 63 orders in 2014, there have been only 10 orders to date in 2015. The LNG fleet increased by 9% in 2014 in terms of total cubic meter capacity, and another 2% in Q1-2015. There has been a significant increase in the number of vessels available on the spot / short-term market in Q1-2015. According to Fearnley, roughly 50 vessels were available as of May 2015, significantly more than the 10 – 20 vessels typically available throughout 2014. The increase in the number of vessels available on the spot market was due to new LNG vessel deliveries, project outages, and less long-haul arbitrage trade to Asia.
LNG Charter Rates
Short-term charter rates declined in 2014, and have decreased further in Q1-2015 due to the increase in vessels available on the spot market. As of May 2015, short-term rates for modern vessels were roughly $30,000 per day according to Clarksons.
Outlook
Teekay LNG expects short-term charter rates to remain weak throughout most of 2015. However, vessel utilization should improve towards year-end. The ongoing ramp-up of volumes from QC LNG in Australia, which shipped its first cargo in December 2014, along with the startup of four new exporting projects in the second half of 2015 will increase LNG trade.
Teekay LNG long-term forecast to 2020 is largely unchanged from last quarter. Over 120 MTPA of new export capacity has reached a final investment decision (FID) and is in various stages of construction. In addition, despite lower LNG prices, new US projects continue to advance. Overall, we expect vessel utilization to improve from 2016 onwards.
Forward Looking Statements
Recent video by Teekay LNG contains forward-looking statements which reflect the company’s current views with respect to certain future events and performance, including statements regarding: LNG market fundamentals, including the balance of supply and demand in the LNG market, and spot LNG charter rates.
The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: changes in production of LNG or LPG, either generally or in particular regions; development of LNG and LPG projects; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; and other factors discussed in Teekay LNG Partners’ filings from time to time with the SEC, including its Report on Form 20-F/A for the fiscal year ended December 31, 2014.
Source: Teekay LNG Partners L.P – Market Insignts
In the onset, I was open with you propecia before and after has changed my existence. It has become much more fun, and now I have to run. Just as it is fabulous to sit.
