SSG No 10 - Shipgaz

The Tenna Kosan owned by Lauritzen Kosan, 4,000 cbm LPG carrier.
Nearly 80 Liquefied Petroleum
Gas (LPG) carrier owners
worldwide are grappling
with deteriorating market
conditions and lower export
volumes. Only 23 per cent of the total
LPG production is shipped by sea, and
this seaborne trade is forecast to grow to
68 million tonnes by 2010 and to as much
as 98 million tonnes by 2015. However,
since Ocean Shipping Consultants (OSC)
made this forecast in 2005, the growth in
demand for LPG products has slowed. One
might have assumed that retail consumers,
environmentally conscious as they should
be, would switch more to LPG from other
fuels, but that has not been the case.
According to Poten & Partners, well
known for its LPG reporting and forecasts,
LPG trading started this year on a sombre
LPG: Substantial
carrier scrapping
necessary
An orderbook of 47
per cent of the existing fleet
should be the writing
on the wall for any owner.
note, even though LPG freight remained
at very depressed levels and butane and
propane prices are as usual following the
oil prices. Owners are also faced with a
total orderbook of 7.3 million cubic metres
(cbm), or some 47 per cent of the existing
fleet. The orderbook is dominated by the
80,000 cbm capacity or bigger and most of
the deliveries are due in 2008 and 2009.
An orderbook of 47 per cent of the existing
fleet should be the writing on the wall for
any owner and large scale scrapping will be
necessary. The biggest current segment, the
70,000–79,000 cbm, has a total of 83 units
with an average age of only 15.8 years, but
with a total capacity of 6.3 million cbm.
The biggest owner of LPG tonnage is
BW Gas with 1.89 million cbm of capacity.
BW Gas is totally dominant in the Very
Large Gas Carrier (VLGC) segment, but
15 of the big vessels are between 20 and
30 years old. Ranged behind BW Gas are
Naftomar Shipping, Mitsui OSK Lines,
Yuyo Shipping, Sanko Steamship, Solvang,
Kawasaki Kisen Kaisha, Kuwait Petroleum
and CMB. The older vessels are likely to
be scrapped in the next two to three years.
Scrapping policies and vetting
As with most other types of tonnage, different
owners adopt different scrapping
16 THE SCANDINAVIAN SHIPPING GAZETTE • MAY 21 2007
LAurITZEN KoSAN