Journal of Energy Markets

Exploring shipping inefficiencies in global liquified natural gas trade patterns

Anastasia V. Shcherbakova, Andrew Kleit and Bagas Dhanurendra


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.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to View our subscription options

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here