The liquefied natural gas (LNG) carrier newbuilding market, which has been cooling down, may usher in a wave of orders.
According to Bloomberg, Japanese shipping giant Nippon Yusen Kaisha (NYK) plans to expand its LNG carrier fleet by about 50% by early 2029 to meet the growing global demand for LNG ultra-cold fuel.
This fleet expansion plan will increase NYK’s LNG carrier fleet from the current 89 vessels to over 130 vessels, including those operated and owned by the Tokyo-based group.
“The company needs to expand its scale,” NYK CEO Soga Takaya said in a public interview. “Everyone is looking at the energy transition from the perspective of decarbonization, and LNG is an important part of that.”
It is worth noting that NYK’s competitor, Mitsui O.S.K. Lines (MOL), is also pursuing fleet expansion.
Reports indicate that MOL plans to expand its LNG carrier fleet from the current approximately 107 vessels to 150 vessels over the next 5 to 10 years. Excluding the two newbuilds scheduled for delivery in 2025 and the 27 vessels currently on order, MOL will need to add approximately 14 additional vessels.
MOL’s order book for 27 LNG carriers has reached a record high for the company. These vessels will be delivered in phases by 2030, including some built for the Qatar project.
Makoto Inomoto, Executive Director of MOL, stated: “From a long-term perspective, the company aims to expand its LNG carrier fleet to approximately 150 vessels to align with global trade demand, with completion targeted between 2030 and 2035.” Makoto Inomoto further noted that while newbuild costs for LNG carriers have declined from their peak of $260 million, they remain elevated. Consequently, the company will only place new orders when backed by firm contracts.
Currently, natural gas is regarded as a key fuel driving the energy transition, capable of replacing highly polluting fossil fuels like coal while supplementing intermittent renewable energy sources. With accelerated energy projects in countries such as the United States and Qatar, LNG production is projected to surge starting next year. Energy giant Shell estimates that global LNG consumption will jump by approximately 60% by 2040.
As demand grows, the number of LNG carriers as transport vessels will also increase. According to data from the International Group of Liquefied Natural Gas Importers (GIIGNL), as of the end of 2024, there were 831 LNG carriers in operation worldwide, and shipbroker BRS estimates that an additional 241 vessels will be added by 2034.