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Tanker Orders Foresee Shift To Natural Gas *PIC*

Tanker Orders Foresee Shift To Natural Gas
By JEFF MCMAHON

(Hyundai is the latest to report a new order for LNG tankers. Image by Getty Images AsiaPac via @daylife)

A surge in orders for liquified natural gas tankers foresees a future less dependent on petroleum—a future in which the United States could become a fossil-fuel exporter, particularly to countries like Japan and Germany that turn their backs on nuclear power.

The U.S. role hinges on debate in Washington over the safety of hydraulic fracturing, or fracking, the process used to tap vast reserves of natural gas trapped in deep shale formations under the Appalachians and elsewhere.

But shipping companies are not waiting for the outcome of that debate. At least 15 liquified natural gas (LNG) tankers have recently been ordered, according to industry sources. Hyundai Heavy Industries of South Korea yesterday reported a $600 million deal to build two LNG tankers for Greek-owned Dynagas.

Daewoo recently reported shifting five orders for crude oil tankers to LNG, according to Korean Shipping Messenger (pdf). Taurus Investment and Securities has predicted 60 new tankers will be needed to meet coming demand.

The boom follows a slump during which only four tankers were built in 2008, none in 2009, and five in 2010. The slump coincided with a downturn in natural gas prices attributed in part to increased production of shale gas in the U.S.

During the slump, according to Financial Times, many LNG tankers sat idle in port, but since the Fukushima Daichi nuclear accident, all are back in use.

A Blue Ribbon Committee appointed by President Obama is hearing testimony today from environmental and industry groups on the safety of shale gas drilling, which has been blamed for drinking-water pollution in neighboring wells.

A major drilling company, Chesapeake Energy, estimates the U.S. will produce enough gas to support an export trade for more than half a century. Just over a week ago, the Department of Energy approved an LNG export terminal for Louisiana.

(Liquefied natural gas (LNG) tanker. Image via Wikipedia)