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There are already signs of weakness in LNG demand as 17 percent of global liquefaction capacity remained unutilised during the second quarter 2015. The LNG fleet continues to rise, with 30 more vessels expected to be delivered this year and a further 41 next year. Nonetheless, the majority are yet to secure dedicated employment; at present, around 30 to 40 vessels are sitting idle.
“With Asian demand stabilising, contractual supply from Australian projects will substantially reduce the dependency of Asian buyers on the spot market,” said Shresth Sharma, Drewry’s lead LNG shipping analyst. Furthermore, the impact on LNG shipping demand will be muted given Australia’s relative proximity to Asia compared to other key sources of LNG supply such as the Middle East. This will serve to further diminish the overall employment prospects for the LNG fleet in the short term.
Approximately 75 percent of new LNG shipping capacity serving this trade has been contracted by Asian buyers, principally the big three importers of Japan, South Korea and China.
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