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Choimet officially took over as GTT CEO in June this year and has since then been on the road visiting customers and partners, including taking part in the opening of GTT’s new office in Doha.
“Out of the current LNG carrier (LNGC) fleet of approximately 700 vessels, more than 300 will surpass 20 years of service within the next 10 years, and around 200 of those will exceed 25 years,” Choimet told LNG Prime at the sidelines of DMG’s World LNG Summit & Awards which was held in Berlin last week.
This creates a “substantial need” for replacement, he said.
“Additionally, newer LNG vessels offer significant advantages: they can carry larger volumes of LNG, have vastly improved thermal efficiency, and consume less fuel, making them more economical and sustainable,” he said.
GTT just secured approval from Lloyd’s Register for its three-tank LNG carrier with a capacity of 200,000 cbm.
This design challenges traditional LNG carrier design norms, highlighting the importance of speed in reducing emissions.
Environmental regulations, shipyard slots
Chimoet said the replacement market would also be shaped by evolving environmental regulations, such as the anticipated revisions to the Carbon Intensity Indicator (CII).
“These regulations will further accelerate the transition to more efficient and environmentally compliant vessels,” he said.
“However, the current LNGC spot market combined with the high workload of shipyards may be a challenge for the replacement market to significantly grow in the short term,” he said.
“Finally, while many aging LNGCs will require replacement, the decision to scrap or convert them—such as into floating storage and regasification units (FSRUs)—will depend on vessel-specific conditions and market opportunities,” Choimet added.
One example of owners getting rid of steam vessels is a recent move by SK Shipping to sell four steam LNG carriers for scrap.
Choimet had just returned from Asia, where he visited South Korean and Chinese shipyards.
He recently said GTT expects shipyard slots for LNG carriers to increase to about 85 per year by early 2026, mainly due to ramping up of capacity at Chinese shipyards.
“Back in 2020, we estimated the capacity to be around 55 slots compared to approximately 70 slots today. We anticipate this rising to around 85 slots by early 2026, mainly due to the ramping up of Chinese shipyards,” he said during GTT’s third-quarter earnings call.
Chomiet said that GTT believes that the number of slots could keep rising.
The number of slots could increase by “10 to 15 slots” in 2028 compared to 2026.
LNG carrier orders
GTT booked orders for 68 LNG carriers in January-September of this year.
The company received orders for 73 LNG carriers last year, down from record 162 orders for LNG carriers in 2022 and higher than 68 orders in 2021.
Many of these orders are related to QatarEnergy’s massive shipbuilding program.
Including QC-Max LNG carriers, QatarEnergy’s shipbuilding program entails the construction of 128 vessels.
As of September 30, 2024, GTT’s order book, excluding LNG as fuel, stood at 350 units.
This includes 325 LNG carriers, 16 ethane carriers, two FSRUs, two FLNGs, and five onshore storage tanks.
The order book for LNG fuel stood at 61 units, all containerships.