Lloyd’s List: LNG Spot Market to Stay at 30% for Foreseeable Future

29 June 2016: “No rise is anticipated in spot market’s share of total LNG trade, due to the needs of cargo buyers and sellers, Poten & Partners forecasts. Spot and short-term charters in liquefied natural gas shipping are expected to remain at about 30% of total LNG shipping for the foreseeable future, rather than rise higher, according to Poten & Partners.The remaining 70% will continue to be held by longer-term charter contracts of more than five years, Poten & Partners LNG analyst Amokeye Adede told Lloyd’s List. While some experts have suggested the LNG spot and short-term market might gradually rise to as much as 40% or 45%, Ms Adede’s conviction of around 30% is based on two crucial factors: longer-term contracts provide security for the LNG buyer; and the LNG seller’s project development costs must be supported,particularly when it comes to securing financing. ‘We don’t anticipate the share of the spot trade rising,’ she said. “…While the short-term market will stay at 30%, the length of voyages will grow, according to Ms Adede. “’The average trade is longer than it was before,’ she said. Highlighting this development, it now takes 1.1 ships to move 1m tonnes, but this is anticipated to climb to 1.4 ships to move 1m tonnes by 2025, she forecast, based on a ship size of 160,000 cum.”