NGO Solutions for Our Climate (SFOC) has published a report that provides an analysis of the liquefied natural gas (LNG) shipping capacity outlook.
In particular, SFOC examines the shipping capacity required for future LNG trade under the International Energy Agency’s (IEA) scenarios, published in October 2023, along with recent order books for LNG carriers. According to the report, the shipbuilding industry contributed to enabling what the IEA nicknamed the gas “golden age”: from 2010-2022, global LNG trade surged by 73%.
The pace of new orders and construction is not slowing down, SFOC notes. In 2024, 2025, and 2026, 251 carriers with a total of 43 million cubic meters (m³) of shipping capacity are projected to be delivered—38% of the capacity in operation as of 2023. While there were 64 orders for carriers in 2023, the first five months of 2024 alone saw 55 new orders placed.
SFOC finds a massive oversupply of LNG shipping capacity now and into the future under all IEA scenarios. Under the IEA’s Net Zero Emissions (NZE) pathway that aligns with the goal of limiting global temperature increase to 1.5°C, no new LNG carriers are needed. With the orders on the books and deliveries scheduled in the next few years, the oversupply in 2030 in this scenario is projected to be equivalent to over 400 modern carriers.
Even under the IEA’s more conservative STEPS scenario, aligned with current private sector momentum and policies already adopted by governments worldwide, an oversupply of LNG shipping capacity is evident. This surplus exists today and is projected to grow. By 2030, the excess LNG shipping capacity beyond what is required is projected to reach 40% of the operating capacity as of the end of 2023, equivalent to 275 carriers.
The glut of new LNG carriers coming online in the near future following the recent intense influx of orders will push the market into oversupply, risking stranded assets and locking in capital for purposes at odds with the global energy transition, SFOC highlights.
