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LNG, Oil-Tanker Demand Seen Increasing in 2013 by Clarkson

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Jan. 11 (Bloomberg) -- Seaborne demand for liquefied natural gas is set to increase this year and outpace new liquefaction projects, according to Clarkson Capital Markets.

LNG seaborne transport demand will rise 5.6 percent in 2013, against fleet growth of 6.9 percent, according to an e-mailed report late yesterday from Clarkson. Liquefaction cools natural gas to minus 260 degrees Fahrenheit (minus 162 degrees Celsius), transforming it to a liquid for shipment, while regasification plants at importing or receiving terminals return the fuel to a gaseous state.

About 15 million metric tons a year of liquefaction capacity is forecast to come on line by 2014, which should employ some 20 modern 160,000 cubic meter (5.65 million cubic feet) ships, equivalent to approximately 80 percent of the vessels ordered this year, Clarkson said. LNG tanker supply growth is expected to exceed demand growth through 2015, according to the investment-banking unit of Clarkson Plc, the world’s biggest shipbroker.

Seaborne refined oil-product trade will increase as a percentage of total oil demand, as global refining capacity moves closer to the sources of production, according to the report. This will increase to 22.3 percent in 2015, compared with 20.3 percent in 2011, analysts led by Urs Dur said.

Demand growth for oil-product tankers will exceed fleet growth between 2013 and 2015. It’s forecast to expand 4.8 percent this year, compared with supply growth of 1.8 percent, Clarkson said.

Tanker Supply

Demand growth is forecast at 2.3 percent this year compared with an increase in crude tanker supply of 4.6 percent, Clarkson said. Demand growth is expected to slow to 1.5 percent next year, while tanker supply is seen increasing to 1.9 percent.

Dry-bulk shipping is to face a “challenging” year, with 213 newly-built Capesize vessels delivered in 2012 and another 176 expected this year, Clarkson said. Capesize vessels can typically transport at least 150,000 metric tons of iron ore.

“Significant oversupply in most dry bulk vessel classes and decelerating growth in global demand for dry bulk commodities point to continued market weakness,” analysts said in the report.

Dry-bulk trade growth is expected to slow to 4.1 percent this year from 4.9 percent in 2012, Clarkson said. Seaborne iron ore and thermal coal trade is seen up 5.8 percent and 5.3 percent respectively this year. The dry-bulk fleet is forecast to expand 9.2 percent in 2013, outpacing demand growth and indicative of another weak year for charter rates, it said.

To contact the reporter on this story: Rob Sheridan in London at rsheridan6@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net