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5 predictions for the natural gas industry in 2015
Chris Clucas, Group Fleet Director at Bernhard Schulte Shipmanagement and Co-Chairman at the upcoming conference Gastech Singapore 2015, predicts what will happen in 2015 in terms of oil and natural gas developments.
2015 is starting with a completely different energy scene to the one that prevailed for most of the past few years.
- The rapid fall in the price of oil will have far-reaching effects on the market. There will also be pressures on the currency markets if current low energy prices prevail.
- The lower oil prices will also reflect in to LNG and LPG shipping. The significant number of new LNGCs due for delivery during the year can be expected to have a downward effect on charter rates, but conversely the availability of uncommitted tonnage will open trading opportunities if arbitrage possibilities arise. Again much depends on other influences, including the schedule for the re-starting of Japan’s nuclear power stations and the global price of coal.
- Lower oil prices have already been reflected in the cost of marine bunker oils – which is one of the main operating costs for all ships. This reduction will be very welcome news for Charterers, and will reduce the disparity in overall operating costs between steam-powered LNGCs and their diesel-electric rivals.
- Lower energy prices will surely cause some re-consideration for projects that are currently nearing Final Investment Decisions. We may see some delay in this sector. And in the case of the US Shale Gas sector, it may prove uneconomic to produce oil & gas at the prices prevailing – which in turn could have a significant influence on the energy balance in the world’s most developed economy.
- We should also mention LNG as marine fuel. A short note to the effect that the low-Sulphur requirements for marine fuel under IMO MARPOL requirements will add impetus to the wider shipping industry adoption of LNG as the preferred bunker fuel. Several LNG bunker supply vessels are now under construction, and we are starting to see long-range ships such as VLCC newbuilds opting to include LNG fuel in the Specification.
During my undergraduate studies, our Economics Professor likened the world economy to a bowl of cherries; if you take one out, all the others shift their positions. Looking at the scene today, it seems that the whole bowl of cherries has been knocked over! However the situation develops, we can look forward to some intensive debates during the Gastech Conference in October.
How will lower oil prices affect the global gas market this year? Let us know what you think is ahead for natural gas in 2015.
These are his personal views and not those of his company.
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