Natural Gas Consumption and Production - Global natural gas consumption is projected to increase by 2.8% year over year in 2024, primarily driven by higher power consumption [313]. - Natural gas consumption in the Asia-Pacific, Middle East, and Africa regions has increased nearly 1.3 times from 2014 to 2024 [314]. - Worldwide natural gas reserves are estimated at 188.1 trillion cubic meters, sufficient for nearly 46 years of supply at current consumption rates [313]. - Natural gas' share of total global primary energy consumption has increased from 18.1% in 1970 to 25.4% in 2024 [308]. - The level of carbon dioxide emissions from natural gas power generation is 50 to 60 percent lower than that from coal-fired power plants [312]. - U.S. domestic gas production has exceeded consumption for much of the year, potentially reducing future import rates [318]. - The geographical disparity between natural gas production and consumption has stimulated international trade in natural gas [316]. LNG Production and Trade - LNG production capacity is set to expand significantly, with 193.9 million tons currently under construction and 353.1 million tons planned [325]. - World trade in LNG has risen from 243.3 million tons in 2014 to an estimated 412.4 million tons in 2024 [329]. - The US LNG exports surged from 3.2 million tons in 2016 to 89.4 million tons in 2024, benefiting from new liquefaction terminals [335]. - Australia became the second largest LNG exporter in 2023, constituting 19.7% of global LNG exports, while the US maintained its position as the largest exporter with 21.5% [333]. - Qatar's North Field Expansion project aims to add 65 million tons per annum (mtpa) of liquefaction capacity, increasing total capacity to 142 mtpa by 2024 [334]. - Russian LNG exports increased by 8.7% in 2024, despite sanctions, supported by supply to Europe, with Belgium, France, and Spain as major markets [336]. - The number of LNG importing countries rose from 34 in 2010 to 45 by December 2024, indicating a growing global market [338]. - Japan, South Korea, and China accounted for 45% of total LNG imports as of the end of 2023, although their share has declined from 53% in 2021 [339]. - China's LNG imports grew from 0.7 million tons in 2006 to 76.8 million tons in 2024, becoming the largest LNG importer in 2023 [340]. - LNG imports in China surged by 41% year-on-year in 2018, driven by government policies to increase natural gas usage [341]. - The US LNG exports to Europe accounted for over 66% in 2023, a significant shift from previous years when Asia was the largest importer [335]. Environmental Regulations and Compliance - The EU's "Fit for 55" proposals include an emissions trading scheme for ships above 5,000 gross tonnage, which commenced in 2024 [382]. - The new FuelEU regulation requires compliance with greenhouse gas intensity limits for ships above 5,000 gross tonnage starting January 1, 2025 [382]. - The IMO implemented global emission control regulations effective January 1, 2020, allowing LNG as an alternative fuel with sulfur content below 0.1% [380]. - The IMO aims for net-zero emissions from international shipping by 2050, with enhanced targets for alternative zero and near-zero GHG fuels by 2030 [448]. - Compliance with revised standards may incur significant costs, including the installation of emission control systems [449]. - The BWM Convention requires ships to manage ballast water to prevent the introduction of invasive species, with compliance deadlines set for September 8, 2024 [462]. - The cost of compliance with ballast water treatment requirements may materially affect ocean carriers' operations [463]. Shipping and Fleet Dynamics - The global LNG fleet totaled 774 ships with a combined capacity of 116.7 million cbm as of February 28, 2025, with a CAGR of 7.2% in fleet capacity from 2014 to 2024 [397][399]. - The average age of the LNG fleet is 10.5 years, with older vessels facing challenges in employment due to EEXI and CII regulations, which may require speed reductions [404][407]. - Spot rates for LNG vessels peaked in 2022 due to increased European LNG imports, but have since normalized and reached a five-year low in 2024 due to high inventory levels and increased fleet growth [415][419]. - Seasonal demand for LNG typically increases in winter months, but the industry has become less dependent on seasonal transport compared to a decade ago [432]. - The introduction of Arc 7 LNG vessels will enable faster shipping routes to Asia, reducing voyage time from 30 days via the Suez Canal to 15 days through the Bering Strait [376]. Financial and Insurance Aspects - The company maintains pollution liability coverage insurance of $1.0 billion per incident for each vessel [478]. - The average deductible for hull and machinery insurance per vessel is $250,000, increasing to $500,000 when trading outside Institute Warrantee Limits [501]. - The company has loss of hire insurance that covers loss of income for up to 180 days if a vessel is out of service due to damage covered by hull and machinery insurance [502]. - Current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident [503]. - The International Group insures approximately 90% of the world's commercial tonnage and has a pooling agreement for claims in excess of $10 million up to approximately $8.9 billion [503]. Company Overview - Dynagas was formed on May 30, 2013, as a Marshall Islands limited partnership for owning, operating, and acquiring LNG carriers [504]. - Dynagas owns a 100% limited partner interest in Dynagas Operating LP, which owns a 100% interest in its Fleet [504]. - Dynagas does not own any real property [506].
Dynagas LNG Partners LP(DLNG) - 2024 Q4 - Annual Report