Significant events this year have changed the face of the LNG shipping industry. Growing production in North America, Australia and elsewhere is leading to an abundance of natural gas.
However, while the supply has grown and is expected to grow further, associated infrastructure and markets have not yet grown as fast as expected – or hoped - and there is an oversupply of new LNG carriers. As a result, approximately one-third of the fleet is now operated in the spot market and utilization rates have fallen. In addition, a few ships have been laid up waiting for better times or are waiting to be converted into either FSUs or FSRUs. Nevertheless, new LNG terminals will come on stream in the near future; the expanded Panama Canal has [recently] opened and potential new regasification facilities will slowly support growing demand. Tonne mile growth is probable and new markets will be likely to lead the development of new shipping routes.
It is critical that a growing trade in LNG maintains its exemplary safety record; class plays a leading role in helping support the safe seaborne trade of gas. In this challenging and uncertain, but optimistic world, the classification societies maintain a significant role in assessing the different solutions developed by shipyards, designers and equipment manufacturers. These provide a response to the client identifying what is technically possible and what meets safety standards and regulations. This oversight by class will be critical as the trade expands and develops.
More STS (ship-to-ship) and FSR/FSU related operations, as well as small-scale LNG developments, are broadening the operational landscape. Risk management standards must not be compromised as these gas activities and operations grow around the world and as new players become involved.
New technology needs to be assessed
Brand new containment systems and evolutions of existing designs are in continuous development. Boil- off gas and sloshing are the two main aspects of design and operations being continuously addressed by containment system designers. The market is always looking for more flexible and more efficient LNG containment systems.
To meet expected requirements the LNG carriers of the future will be expected to:
Propulsion systems have also evolved significantly in the last couple of years. Today two-stroke dual-fuel engines are the clear trend providing the efficiency, flexibility, economy and simplicity required.
This is only the beginning of a new period of innovation in how we transport and use LNG. Think more tank types, more containment types, more propulsion options, more sizes of ship, from, say, 5,000mᶾ up to perhaps 300,000mᶾ, and more speciality ships, like the 15 vessels of size 172,000mᶾ we are classing for the Yamal project that can break heavy Arctic ice using astern propulsion.
The excellent safety record of LNG shipping is the result of sound regulations and high commitment to risk management, activities that are of the utmost importance in the philosophy of Bureau Veritas Group.
Share your insights and join the conversation: How will the LNG shipping industry grow further in 2018? Leave your comments below.
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