Kpler LPG (Forcus on Newbuilds)

 

Originally Released on 5 October 2017

Vessels

4 VLGC’s are currently on their way to discharge in the FE via Cape of Good Hope, ex-US:

  • Shell’s Hampshire, ex-Nederland, signalling for SGP Area, ETA 1-Nov.
  • UNIPEC’s Sunny Joy, ex-Enterprise, signalling for SGP Area, ETA 3-Nov.
  • Vitol’s Commodore, ex-Marcus Hook, is expected to FE by 10-Nov.
  • Passat, ex- Enterprise, signalling for SGP Area, ETA 8-Nov.
Americas

 

Geogas’ Clipper Moon, ex- Freeport, has discharged fully via STS with Bw Gemini at Ocoa Bay Anchorage. She is now signalling for Houston, ETA Oct-8.

Australia

Astomos’ Gas Capricorn is signalling to load at Bayu Undan FPSO, Australia, ETA 8-Oct.

Africa

Total’s Hellas Gladiator signaling for Bonny Island, ETA 21-Oct.

 

Newbuilds Market Focus

Since the start of the 2015, the LPG trade has seen a considerable expansion due to US shale gas, demand growth and refinery capacity expansion in Asia. This is reflected in the rapid growth of the gas carrier fleet, where 86 newbuilds were added to the global fleet in 2015, a staggering 62% increase from 2014 (based on Kpler data).
The traditional trading routes of East of Suez have been disrupted by massive export volumes coming from West of Suez, namely the United States, which together with M.East, are feeding the constant LPG demand growth of Asia.This growth is linked to Chinese petchem plants as well as the replacement of high carbon-emission fuels in rural areas, especially in India, which is now the world’s second largest LPG importer.
In order to meet the increased bulk volumes and also try to take advantage of the arbitrage window between the US and Asia, a large number of VLGCs was ordered between 2014 to 2016, with Kpler data suggesting a vast expansion from 8 to 35 and then 44 VLGC Newbuilds in 2014, 2015 and 2016 respectively.

 

However, the large increase in LPG supply and fleet availability influenced the VLGC freight rates and 2017 delivery numbers contracted to 25 vessels (19 delivered and 6 expected by the end of Q4 2017).
During the same period, the fleet of Handysize, MGC and LGC also increased substantially with double orders of Handysize between 2014-2015, addition of 5 LGCs in 2015-2016 and high growth rates in deliveries of MGCs after 2016. Remarkably, the addition of new SGCs contracted as demand remains more challenging in this market. In addition, Kpler data indicate no LGC delivery in 2017, while the ever-growing quantity of US Shale ethane is opening the new VLEC market, which currently numbers 6 vessels.

Fleet Evolution

Since the beginning of the market, the fleet has evolved considerably from SGCs, that are able to transport small capacities, to VLGCs and even VLECs, that can carry more than 70,000 cb of product.
Looking at the active vessels, Kpler data indicate a vast expansion of the fleet starting from 1990s (165 vessels were delivered between 1991 and 1995), while the VLGC boom started in 2005 onwards.
The next figure presents the current LPG Fleet mix:

This week, we saw newbuilds being added to the fleet, including 2 VLGC’s:
  • Gas Zenith (79,000cm) is leaving the Ulsan Shipyard before her expected date (Dec 2017) and is signalling for Balboa Anch, ETA 21-Oct. She’s relet to JGE until Dec 2022.
  • Unique Shipping’s newbuild Oriental King (84,000cm) left the Ulsan Shipyard and is now heading to USGC for her first load, ETA 29-Oct.
  • Mygas (12,000cm) joined the fleet of Sloman Neptun. She is operated by Unigas International.

Separator Line