Liquefied natural gas (LNG) is not just becoming the world’s “go to” fuel it is becoming a major source of new jobs with vacancies likely to be created for 2500 specialist crew members on the world’s rapidly-expanding fleet of LNG tankers.
The strong outlook for jobs in LNG is one of the discoveries made by the investment bank, J.P. Morgan , in a study into the industry which it believes has the potential to be much bigger than is currently appreciated.
The bank’s analysis is good news for existing producers of LNG in Middle East countries such as Qatar, and for the country soon to claim the title of world’s biggest LNG exporter, Australia.
Demand Strong Enough To Absorb U.S. Exports
Of particular interest is a finding that the entry of the U.S. into the LNG export business will not threaten other producers because demand for the fuel in Asia will be strong enough to absorb U.S. production.
The recent trade deal between Russia and China to pipe gas from Siberia into the energy-hungry Chinese market will also not dim demand for seaborne LNG.
The bank said in its Global LNG report that rising demand for the fuel might soak up incremental supplies “prolonging market tightness” which will be positive for producers and shipyards.
Concern that recent weakness in short-term LNG transactions has been discounted as a seasonal event, as has concern that demand might fall as Japan re-starts its mothballed fleet of nuclear power stations.
Ship Fuel Potentially A Major New Market For LNG
Apart from Asian countries one of the potentially surprising new markets for LNG is the world’s shipping fleet as demand grows to replace heavy marine fuels with low-pollution gas.
“If all bunker fuels were to be replaced then an additional 190 million ton of LNG would be required,” J.P. Morgan said — equivalent to an 80% increase in current LNG traded volumes.
Key findings in the bank’s study include the positive price signals for producers and that there is an “upside risk” to Asian demand. “China may surprise,” the bank said, and that North American labor costs could be a problem for U.S. and Canadian export projects.
“With labor costs representing around 40% to 50% of LNG projects, Japanese engineering and construction companies see management of labor cost inflation as increasingly important for North American export projects,” J.P. Morgan said.
U.S. Skills Shortage Might Emerge
The bank’s survey of the LNG industry found that Japanese firms were forecasting higher costs and a possible labor shortage, especially from 2016-17 for more basic jobs such as welding.
Demand for gas in China is expected to grow at more than 10% a year, lifting LNG imports from around 15 million tons a year to between 35-and-40 million tons a year by 2020.
The rapid expansion of seaborne LNG is expected to boost activity in Asian shipyards and lead to a demand for officers and crew.
10,000 LNG Tanker Jobs
“NYK, a Japanese shipping company, sees increasing demand for officers and crew for LNG vessels as training requires 10 years experience (for officers) and three years experience (for crew) on LNG vessels,” J.P. Morgan said.
“The global market requires 10,000 senior LNG crew members, up from 7500 today based on NYK fleet outlook.”
One of the factors behind the new jobs is that LNG shipped from the U.S. will take longer to reach Asian markets which means there will be more ship movements.