Executive Summary
The past decade marked a 'Golden Age' for LNG, fueled by rising Asian gas demand, surging U.S. LNG exports, and geopolitical shifts in Europe. LNG trading volumes have surpassed traditional pipeline gas, with LNG carrier fleets expanding threefold from 325 units in 2014 to 970 units in 2023.
This report by Solutions For Our Climate (SFOC) reveals the key yet overlooked industries behind this rapid expansion of the LNG shipping market, compared to other more prominent parts of the fossil gas value chain.
Key findings of the research underscore the significant financial contributions from South Korea's public financiers, totaling $44.1 billion across 652 cases in LNG carrier shipbuilding over the past decade (2013-2023). Notably, this report also emphasizes a pivotal shift in LNG carrier ownership, with private equity-linked entities and traditional shipowners driving shipbuilding orders over the last decade, while energy majors have decreased their involvement.
The findings highlight imminent risks, with LNG carrier fleets on order projected to exceed estimates by the International Energy Agency (IEA), potentially jeopardizing global climate targets. To address these concerns, the report recommends urgent actions to the following stakeholders:
1. Financiers:
2. Shipowners:
3. Shipyards:
Failure to realign LNG carrier capacity with the net-zero trajectory poses severe risks to global climate targets, potentially surpassing critical tipping points scientists have warned about. By acting on these recommendations, stakeholders can mitigate these risks and contribute to a more sustainable and resilient energy future.
Key Information
Source: SFOC, World LNG Report, IGU (2014), Clarkson
Source: SFOC, World LNG Report, IGU (2014), Clarkson