The scrapping of outdated LNG (Liquefied Natural Gas) carriers equipped with steam turbine engines is gaining traction. In 2024, eight LNG ships were scrapped — more than double the number from the previous year. Currently, spot charter rates for LNG carriers have hit historic lows, falling below $20,000 per day. If the prolonged market slump continues, the scrapping of approximately 200 aging LNG vessels with steam turbine (ST) engines could accelerate further.
(Text by Hirofumi Yamamoto)
Photo courtesy=LNG cash buyers
Ship engines are generally classified into two main types: diesel engines and steam turbines. Today, most ships opt for diesel engines due to their superior thermal efficiency and fuel economy. Historically, steam turbines were widely used due to their ability to generate high output with minimal vibration and ease of maintenance. However, the oil crises of 1973 and 1979, which caused fuel prices to soar, marked a turning point. The inefficiency of steam turbines — consuming about twice as much fuel as diesel engines for the same output — led to their decline in popularity.
According to data from the U.S.-based maritime intelligence provider VesselsValue, a division of Veson Nautical, six LNG carriers (excluding small vessels) were scrapped by November this year. The total number of LNG ships scrapped in 2024 is expected to reach eight, compared to just one in 2022 and three in 2023.
The UK-based TradeWinds newspaper reported remarks from Nicholas Gleeson, Chief Financial Officer (CFO) of ADNOC Logistics & Services, a subsidiary of the Abu Dhabi National Oil Company, during a Capital Link webinar. Gleeson predicted a sharp increase in the dismantling of aging steam turbine LNG carriers, noting that around 100 older LNG ships will see their long-term charters end in the coming years.
Clarksons Research, a leading UK shipping consultancy, highlighted that current spot charter rates for LNG carriers are well below the break-even point, which includes vessel costs and operational expenses. The latest two-stroke LNG ships are earning $23,000 per day, while newer tri-fuel diesel-electric (TFDE) vessels fetch around $14,000 per day. In contrast, older steam turbine ships are struggling with spot rates of just $5,500 per day. Despite depreciation, these figures fall significantly short of the $80,000 per day break-even level required for modern LNG ships.
Even during the winter season, traditionally a peak period for energy demand, the LNG shipping market is experiencing a pronounced easing of supply-demand conditions. The lack of significant price differentials between regional gas markets and a subdued outlook for future prices have reduced trading opportunities, dampening demand for shipping capacity. Additionally, the delivery of approximately 70 new LNG carriers this year has exacerbated the surplus of available tonnage.
The global fleet of LNG carriers with tank capacities exceeding 100,000 cubic metres numbers around 700 vessels. Of these, approximately 200 are outdated steam turbine ships. Compared to the latest vessels, these older ships not only have smaller cargo tank capacities but also suffer from roughly 50% lower fuel efficiency.
When it comes to handling these aging LNG ships, owners have several options. They can idle or lay up the vessels while waiting for market conditions to improve, or they can convert the ships into floating storage and regasification units (FSRUs). However, market observers point out that securing renewed charter contracts for older steam turbine ships is increasingly difficult, and finding new buyers for these vessels is equally challenging. Given that around 80 new LNG carriers are expected to enter service next year, oversupply in the market is likely to persist, prompting more shipowners to opt for scrapping.
“The prospects for securing renewed charters for aging steam turbine ships are bleak, and the chances of finding buyers are slim,” said a market insider. “With an influx of new vessels scheduled for delivery in the coming year, the oversupply situation is expected to continue for the foreseeable future.”
In addition to scrapping or conversion, there is also the option of laying up older steam turbine ships in anticipation of future market recovery. However, the economic viability of this approach remains uncertain, particularly with increasing environmental regulations and pressure to adopt cleaner and more efficient technologies in the shipping industry.
Analysts suggest that many shipowners will have to make difficult decisions regarding their aging fleets. The combination of low charter rates, high operating costs, and the influx of modern LNG carriers will leave little room for older vessels to remain competitive in the current market. As a result, scrapping seems to be the most likely outcome for a significant portion of the outdated steam turbine fleet.
スチームタービンの旧式ＬＮＧ船のスクラップ処分が高まる
旧式ＬＮＧ（液化天然ガス）のスクラップ機運が高まっている。２０２４年にスクラップ処分されたＬＮＧ船は８隻となり、昨年実績の２倍超に増えた。足元でＬＮＧ船のスポット用船料は１日当たり２万㌦以下の歴史的な安値を付けている。市況低迷が長期化すれば、約２００隻あるとされる旧式スチームタービン（ＳＴ）機関を搭載したＬＮＧ船のスクラップ処分が加速する可能性もある。
船舶のエンジンは大きく分けるとディーゼル機関とＳＴの2種類ある。現在、熱効率（燃費）が優れたディーゼル機関を採用している船舶が大半だ。
過去、船舶の内燃機関では、大きな出力（馬力）が得られ、振動も少なく、保守（メンテナンス）も容易というメリットからＳＴが広く採用されてきた。しかし、同じ出力を得るためにディーゼル機関の約2倍も燃料を消費するという燃費の悪さから、1973年と1979年のオイルショックを契機に燃料油の価格が大幅に上がってからは、ほとんど採用されなくなった。
運航管理システムを提供する米ベソン・ノーティカルのデータインテリジェンス部門ベッセルズ・バリューによると、今年は11月までにＬＮＧ船６隻（小型船除く）がスクラップ処分された。最終的に２０２４年通じて８隻のLNG船がスクラップ売船されたもようだ。２０２２年は１隻、23年は３隻だった。
英トレードウインズ紙によると、キャピタルリンクのウェビナーのパネリストに登壇したアブダビ国営石油グループのADNOCロジスティクス＆サービス社の最高財務責任者（CFO）であるニコラス・グリーソン氏はLNG船部門では、古いST船の解体の急増が見込まれると指摘。「今後数年の間に長期契約を終了する老齢LNG船が約100隻ある」と述べた。
英クラークソンズ・リサーチによると、現在、１日当たりのＬＮＧ船のスポット用船料は最新の２ストローク船が日建て２万３０００㌦、比較的新しい３元燃料ディーゼル電気推進船も１万４０００㌦と、いずれも新鋭のLNG船が１日当たり必要となる損益分岐点（船価プラス運航費）８万㌦前後を大きく下回っている。減価償却が進んでいるとはいえ、ＳＴ船に至っては同５５００㌦の状況だ。
足元では冬場のエネルギー需要期にも関わらず、ＬＮＧ船の需給緩和が顕著になっている。天然ガス・ＬＮＧの地域間の価格差が開かず、先高観もないため、トレーディング機会が減り船腹需要も減退。今年は新造船約70隻が供給されたこともあり、船腹余剰感が強まっている。
世界のＬＮＧ船の船腹量（タンク容量10万立方㍍超）は７００隻規模。そのうち旧式ＳＴ船は約２００隻ある。それらは最新鋭船に比べて貨物タンク容量が小ぶりなうえ、燃費性能が50％程度も劣るという。
旧式ＬＮＧ船の処遇としては、停船・係船しマーケットの回復を待つこともできる。ＦＳＲＵ（浮体式ＬＮＧ貯蔵・再ガス化設備）に改造し転用する選択肢もある。
だが、「旧式ＳＴ船は用船契約の更新は困難で、新たな買い手を探すことも難しい。来年も新造船約80隻の就航が予定されており、船舶供給過多の状況が当面続く可能性もある」（市場関係者）ことなどから、スクラップ処分に踏み切る船主が増えることが予想される。