LNG tanker market hit by glut in vessels

[LONDON] Deliveries of new gas tankers have created a glut that is threatening to tip some operators into losses, just as other shipping markets emerge from their worst downturn in decades.

The liquefied natural gas (LNG) tanker market was until recently the only bright spot in the freight industry. A global surge in the demand for gas, led by Japan in 2011, boosted trade, tied vessels to longer routes and drove rental rates to record highs.

But the 119 new carriers ordered from 2011 will have expanded the fleet by over 30 per cent by end-2017. As tankers leave the shipyards, delays in construction of new LNG export plants and erratic global gas output have curtailed demand for them.