Exploring shipping inefficiencies in global liquified natural gas trade patterns

Anastasia V. Shcherbakova, Andrew Nathan Kleit, Bagas Dhanurendra

Research output: Contribution to journalArticle

Abstract

As global liquefied natural gas (LNG) markets have developed, some key inefficiencies seem to remain, including persistent price differences, a lack of arbitrage activity and excessively long LNG tanker routes, evidenced by crossings of fully laden tankers. In this paper, we examine GPS-communicated data on LNG tanker movements between January 2011 and August 2012 to determine possible drivers of inefficient shipping routes from producing to consuming countries. We find that perceived routing inefficiencies are actually driven by market forces such as peak demand seasons, spot cargoes and transportation constraints, induced by a tightening of the shipping market and a rise in spot charter costs. Economies of scale in tanker technology do not appear to play a role in the formation of observed shipping routes, with higher-capacity tankers being associated with more "efficient" (ie, shorter) voyages. Finally, vessels operated by vertically integrated energy companies appear to be associated with more efficient (or shorter) voyages than LNG tankers operated by independent shipping firms.

Original languageEnglish (US)
Pages (from-to)67-86
Number of pages20
JournalJournal of Energy Markets
Volume8
Issue number2
DOIs
StatePublished - Jun 1 2015

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Freight transportation
Liquefied natural gas
Natural gas
Global positioning system
Inefficiency
Trade patterns
Shipping
Costs
Industry

All Science Journal Classification (ASJC) codes

  • Energy(all)
  • Economics and Econometrics
  • Strategy and Management

Cite this

Shcherbakova, Anastasia V. ; Kleit, Andrew Nathan ; Dhanurendra, Bagas. / Exploring shipping inefficiencies in global liquified natural gas trade patterns. In: Journal of Energy Markets. 2015 ; Vol. 8, No. 2. pp. 67-86.
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Exploring shipping inefficiencies in global liquified natural gas trade patterns. / Shcherbakova, Anastasia V.; Kleit, Andrew Nathan; Dhanurendra, Bagas.

In: Journal of Energy Markets, Vol. 8, No. 2, 01.06.2015, p. 67-86.

Research output: Contribution to journalArticle

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