Seaborne Trade in LPG and Chemical Gases (13967 bytes)
Revenues and Operating Costs for LPG Tankers (15115 bytes)
Demand for liquefied petroleum gas in Southeast Asia is rising faster than average world consumption, causing a corresponding rise in seaborne LPG trade.
However, LPG exporters are likely to see transportation costs rise between 1995 and 2000 as a current surplus in the LPG tanker fleet is trimmed.
That's the view of Drewry Shipping Consultants Ltd., London, which says total trade in LPG and chemical gases-ammonia, ethylene, propylene, and vinyl chloride monomer-has increased each year since 1980.
Total trading in LPG and chemical gases rose to 51 million metric tons/year from 22 million metric tons/year during 1980-93.
"This is equivalent to an average annual growth rate of 6.7%," Drewry said. "Total trade is expected to continue growing, albeit at a lower rate, reaching 63 million metric tons by 2000. "
World consumption of LPG increased from 85 million metric tons in 1980 to an estimated 138 million metric tons in 1993, equal to an average growth rate of 3.8%/year.
U.S., Japan, and western Europe account for two thirds of world demand. But markets for LPG in the developed world are mature, with growth rates of 2-3%/year the norm.
"Whereas the U.S. and Europe almost meet their LPG requirements from domestic production," Drewry said, "Japan is totally reliant on imports and is therefore significantly more important in terms of seaborne trade."
Outside the Organization for Economic Cooperation & Development, demand for LPG has been rising for some time, with rapidly growing imports by countries such as South Korea stimulating the market during the last 10 years.
The single largest producer of LPG is the U.S., although nearly all its 3032 million metric tons/year output is used in the domestic market.
The second largest producer-and most important for seaborne trade-is the Middle East. There, production has risen from 13 million metric tons in 1980 to 27 million metric tons in 1993, of which 20 million metric tons came from Saudi Arabia.
"Other key producers as far as the shipping market is concerned are Algeria, Nor-way, U.K., Indonesia, Malaysia, and Australia," Drewry said.
Although many LPG markets are mature, Drewry expects increases in the rapidly expanding economies of the Far East and Southeast Asia.
"Overall, global demand for LPG is expected to grow by 2-3% a year between now and the end of the decade," Drewry said.
TANKER FLEET
Growth in LPG and chemical gases trading has spawned a growing tanker fleet with two distinct shipbuilding booms. The last of these was 1990-94, when fleet capacity rose 37% to 11.2 million cu m.
"The problem for carrier operators is that the expansion in the fleet during these periods has been way in excess of changes in demand," Drewry said. Current surplus capacity in the LPG fleet is estimated at 20%.
"Indications are that the size of the fleet is about to level out again at a time when vessel demand shows every sign of continuing to increase," Drewry said. "Overcapacity will be trimmed, leading to improvements in the balance between supply and demand."
Drewry predicts the current fleet of 11.2 million cu m capacity will grow to 11. 7 million cu m in 1995 and 12 million cu m in 2000.
Carrier demand is expected to grow from 8.8 million cu m in 1993 to 9.7 million cu m by 1995 and 10.8 million cu m by 2000.
Copyright 1995 Oil & Gas Journal. All Rights Reserved.
