Howe Robinson Partners
14:00 - 14:25
Wednesday, 18 September 2019
S2.5 LNG Shipping - A Change Once More!
Contracts trading and pricing
The end of 2018 saw record highs for the price paid to owners for the short term movement of LNG. Within the last 5 years we have also seen record lows recorded for these same owners. This abstract will endeavour to show why we are seeing a complete change in the way that LNG is moved around the world. It will also take into consideration the new owners who are entering, the market, the parameters required to beome a LNG ship owner and the price owners need to pay for entering this market. In addition, the abstract will show how charter periods are changing which has an overall impact on how LNG carriers are financed. The takeover of DSME by HHI could also have a major impact on the number of LNG carriers which could be built and will we begin to see some diversification into other countries? The potential orders from Qatar alone could keep the yards going well into the mid 2020s and what impact will that have on other projects. rising new building prices could potnetially put further pressure on charter rates which are alrady facing competition from all side. Shipping is a necessary evil for us to move a product which is becoming more commoditised and into the realms of the crude oil market. Pricing flows, abitrage, swaps, futures are all being added to an industry which historically has been very traditional. Trading houses lead the short term markets and as production grows, so will the short term movement of LNG. The abstract will cover these points whilst at the same time provide some insight into where we are looking in the future. Changing patterns of trade brought about by equilibrium in production in all three of the major trading basins, the Atlantic, Paicifc and Middle East, could have a major impact on how LNG is shipped. However, shipping in itself is an industry which has learned how to survive and we intend to portray as to why this will continue to thrive in an ever changing market.