LNG Shipping as a Commodity

30 May 2017: Last week’s opinion (22-May-17: “Assessing Residual Value”) discussed different LNG vessel valuation methodologies in a market with limited liquidity. As residual value becomes a larger component of total vessel value the shipping industry struggles with the link between book value and market value of existing assets. Over the previous decade, term charter periods have decreased by almost 50% and over the next decade a large number of existing vessels are coming off term charters (Fig. 1). A common discussion among market participants is if, or when, will LNG shipping become ‘commoditized’. The idea that LNG vessel capacity will become homogenous and always available for prompt hire. Please fill out the following form to access the full article.