Shipping costs for all forms of maritime transport are constantly under pressure from various market forces but more notably the general scenario is “there is always somebody prepared to do it cheaper”. This unfortunately usually leads to the lowering of standards that are rarely corrected without some form of unforeseen external intervention, e.g. “Act of God”.
LNG transportation is first and foremost shipping business but one that has seldom been under the economic pressures endured by say the oil tanker or dry bulk markets.
There has been downward pressure on LNG prices and it looks as if the traditional 20 years “take or pay” concept is losing popularity. The markets are changing and the Japanese/Korean markets can longer be relied upon to take all of the new LNG that a project may produce. Flexibility is now the key word for LNG and this flexibility will need to extend from the sales contract through to shipping. However, flexibility is mainly driven by the need to reduce costs and shipping is very much an element in these costs reductions.
