SINGAPORE - The world could be facing a glut of giant liquefied natural gas tanker ships set to be built this decade even as nations shift away from fossil fuels to reach global temperature goals, a report published on Thursday said.
“To avoid the worst damages from climate change, the world is moving towards decarbonising the global economy, a transition that requires us to drastically reduce our reliance on fossil fuels over the next 10 to 20 years,” said report author, Climate Analytics analyst Dr Victor Maxwell. Asia remains the top customer of LNG and the region’s share of global LNG demand is forecast to be above 60 per cent in 2023, with China and Japan being the top buyers. LNG is used mainly for power generation, heating and industry.The International Energy Agency said in its 2022 energy outlook that the momentum behind natural gas growth in developing economies had slowed, notably in South and South-east Asia.
“The risk is imminent for Korean shipbuilders who are highly reliant on building hundreds of LNG carriers that a net-zero world will not need, and that they may not even be paid for,” said Mr Dongjae Oh, the oil and gas finance programme lead at Solutions for Our Climate.S-E Asia’s gas expansion plans could hurt efforts to mitigate climate change: Report
Despite this, the report’s authors said South Korean shipbuilders are looking at a wave of new orders from oil and gas companies. For example, QatarEnergy and South Korean shipbuilders were discussing an order of up to 40 new LNG carriers for delivery in 2027, the authors said.