Bloomberg News

LNG Tanker-Fleet Surge Risks Worker Shortage, Recruiter Says

June 20, 2011

(Updates with LNG demand in third paragraph.)

June 20 (Bloomberg) -- Expansion in the global fleet of liquefied natural gas tankers may cause a shortage of shore- based workers qualified to manage the ships, said Faststream Ltd., the largest recruiter for the industry.

“Shipowners are going to be hard pressed to find the right people to manage these complex vessels,” Southampton, England- based Chief Executive Officer Mark Charman said by e-mail today. “Many of our clients are looking for people and keeping one eye open all the time, and they just can’t find the candidates they need,” he said later by phone.

LNG demand is surging as Japan, buyer of a third of the world’s cargoes, seeks alternative fuels after 57 percent of its nuclear power was closed following radiation leaks from Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant. That’s spurring owners to order more vessels at a time when earnings from other shipping markets are slumping.

While LNG technical superintendents working ashore usually earn between 62,000 pounds ($100,500) and 65,000 pounds a year, they can make as much as 80,000 pounds tax-free working as captains, Charman said in an interview. That’s forcing owners to recruit from other areas of the shipping industry, meaning candidates may lack the necessary expertise for LNG, he said.

More Job Openings

Faststream has had 30 shore-based vacancies to manage LNG tankers so far this year, compared with eight for all of 2010, according to Charman. The complexities include different propulsion systems and the requirement to chill LNG cargoes to keep them in liquid form, he said.

New carriers ordered this year will expand LNG shipping capacity to 380 billion cubic meters (13.4 trillion cubic feet) by 2015 from 300 billion cubic meters today, said Charman. He also said employee shortages are most acute in Europe, with U.K. immigration limits preventing hiring of experienced workers from outside the region.

Use of the fuel may be entering a “golden age,” the International Energy Agency said June 6, predicting a 50 percent jump in demand by 2035 on higher consumption in China and the Middle East. Japan’s gas needs may gain 13 percent to a record in the next 12 months, according to the agency.

Demand for fuel that’s liquefied by cooling natural gas to about minus 260 degrees Fahrenheit will reach a record this year as nations from the U.K. to South Korea increase curbs on pollution, Barclays Capital estimates. Natural gas emits about half as much carbon dioxide as coal. Owners are sailing the 900- foot tankers that carry LNG at the highest speeds in at least three years as the rush for fuel erodes a decade-long glut of the ships.

Twenty-four LNG tankers have been ordered at shipbuilders in South Korea and China in 2011, according to data from Clarkson Research Services Ltd., a unit of Clarkson Plc, the world’s largest shipbroker. There are 44 ships contracted and 362 LNG carriers in service, Clarkson data showed.

--Editors: Dan Weeks, John Deane.

To contact the reporter on this story: Michelle Wiese Bockmann in London at mwiesebockma@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net


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