Global orders to build liquefied natural gas carriers (LNGC) are set to rebound this year after a 2025 slump as growing LNG output and vessel fuel efficiency drive demand, industry executives and analysts say.
The rise in orders is offsetting concerns that supply disruptions from the U.S.-Iran war may reduce near-term shipping demand and pressure freight rates.
Since late last year, shipbuilders in South Korea and China have received more orders, with 35 new LNGC builds contracted in the first quarter, according to consultancies Poten & Partners and Drewry.
By comparison, 37 LNGCs were ordered in all of 2025, with a record 171 orders placed in 2022, Drewry data shows. Each tanker costs $250 million-$260 million, and takes over three years to build.
Upcoming LNG production in the U.S., Africa, Canada and Argentina will generate tanker demand, along with a push towards fuel efficiency and accelerated vessel demolitions, said Pratiksha Negi, Drewry's lead analyst for LNG shipping, with steam turbine and diesel-electric carriers expected to be phased out.
FLEXIBLE U.S. VOLUMES
The global LNGC fleet numbers over 700 vessels, which handle the more than 400 million tons per annum (mtpa) of LNG supply.
Some 72 mtpa of new LNG capacity was approved globally last year, and more than 120 mtpa of new U.S. LNG supply is coming to market in the next 3-4 years, said Fraser Carson, principal analyst, global LNG at Wood Mackenzie.
The growth of U.S. LNG and flexible LNG supply creates trading patterns that require more shipping, he said.
U.S. LNG is typically sold on a free-on-board basis with destination flexibility, allowing mid-voyage diversions that can tie up vessels for longer.
Japan's Mitsui O.S.K. Lines (9104.T), opens new tab, the world's largest LNGC fleet owner with 107 vessels, expects U.S. LNG supply investment to spur tanker orders, CEO Jotaro Tamura said.
The company plans to grow its LNGC fleet to approximately 150 vessels by around 2035.
Meanwhile, the demolition of steam-propelled LNGCs has accelerated since 2022 to a record 15 vessels last year, Drewry data showed, due to poor economics and tighter emissions regulations.
A proposed framework by the International Maritime Organization to cut shipping emissions is also driving demand for new builds, said Uma Dutt, vice president, LNG at global ship management firm Anglo-Eastern, as the industry switches to dual-fuel vessels that can run on LNG.
WAR COMPLICATES OUTLOOK
The Iran war, however, presents conflicting signals for LNG shipping. Supply disruptions are pushing Asian LNG buyers towards alternative sources like Atlantic basin supply, increasing travel distances for ships. It could also boost demand for LNG projects elsewhere, lifting overall demand for more carriers, said Wood Mackenzie's Carson.
But on the other hand, the war has also disrupted LNG flows through the Strait of Hormuz and sidelined 12.8 mtpa of Qatari capacity for three to five years, which could curb shipping demand and weigh on freight rates at a time where an "avalanche" of ship supply is already coming, he said.
Qatar, which operates over 100 LNGCs, will add 70-80 new builds over the next 3-4 years while the UAE's ADNOC is expected to double its fleet to 18 within 36 months, said Carson.
"Most of these new build vessels were earmarked to serve under-construction LNG projects that are now facing delays," he said.
"The longer those delays persist, the more likely it is that these ships are offered to the market on sublet arrangements -softening rates considerably."
Poten & Partners and Drewry expect a record 90-100 LNGCs to be delivered this year, up from 79 in 2025.
However, Drewry's Negi said seven of nine LNGCs initially scheduled for delivery this year and now pushed back to 2027-28 are linked to QatarEnergy.
Poten & Partners senior LNG analyst Irwin Yeo said some firms may delay placing big new build orders due to uncertainties triggered by the war.
"Market uncertainty and rising shipbuilding costs, including labour and raw materials amid the current Middle East crisis could deter some from placing orders."
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