The slower pace in the gas market has resulted in a number of LNG carriers being parked of idling in and around Singapore.
It could be an indication that the slowdown in the gas market could be turning into a crisis, Reuters reports.
An LNG hub like Singapore is a preferred port for shippers. Lower LNG spot prices in Asia, lower demand mean that many of the shipping companies need to park their unused tankers and ports like Singapore provide maintenance capabilities before the vessels get called back into operation.
According to estimates by ship brokers, one-tenth of the global LNG fleet is not being used due to Asian gas market slow growth.
According to Javier Moret head of LNG organization at RWE, 30 or 40 oil and gas carriers are located around Singapore with nothing to do.
Reuters reports that some LNG tankers have been parked for months, and that 15 tankers currently parked in the region have a total capacity of 2.26 million cubic meters of LNG, creating losses of $60,000 in daily charter fees to ship owners.
Partly influenced by oil slump, it is believed that the weakness in energy markets could put off the emergence of LNG as the pre-eminent energy source, ANZ bank told in its research.
Besides gas prices, carrier rates have also tumbled according to shipping services company, Clarkson. The rates have drop from $90,000 in 2013 to $60,000, and analysts believe the daily LNG charter rates are about to remain low for whole 2015.
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LNG World News Staff; Image: BG Group