LPG drives order frenzy for VLGCs

Drewry Shipping Consultants says that a sharp rise in LPG demand is fuelling an order frenzy for very large gas carriers (VLGCs).

In the last six months to June 2014 the order book for LPG carriers jumped over 25% from 171 vessels to 215 and for VLGCs 68% from 47 to 79 ships.

Apparently record earnings and the prospect of rising long-haul trade between the US and Asia has encouraged ship owners to invest in new tonnage.

Shantanu Bhushan, Drewry’s lead energy shipping analyst, said that LPG shipping has managed to attract around US$2.7bn in newbuilding investment so far this year.

“Most of the current order book for VLGCs are expected to join the LPG fleet between 2014 and 2016 and with minimal demolition activity anticipated, Drewry is forecasting that fleet capacity will rise 52% over this period,” he said.

Drewry said that projects approaching refinery turnaround season in the Far East could help boost into the region even further.

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