* LNG shipping firm to run at or near full capacity for years
* Shipyards fully bookend through 2014
* Charter rates likely peaked but not big fall expected
OSLO/PERTH, March 12 (Reuters) - Freight rates for liquefied natural gas, the super-cooled commodity in red hot demand as the world struggles to replace lost nuclear capacity, will stay elevated and volatile at least through 2014, shipping insiders said.
LNG is one of the few profitable sectors in the shipping industry, in contrast to dry bulk and tanker markets, which continue to suffer from oversupply and funding difficulties.
The LNG vessel fleet will be running near full capacity over the next several years as Asian demand soars, driving up tanker earnings after years of poor demand.
Many of the latest orders for new tankers are speculative punts designed to reap the benefits of increasingly fat chartering returns.
The handful of shipyards that can build the highly specialized LNG vessels are fully booked through 2014, and the new vessels on order will be barely enough to handle output from a slew of LNG production projects either coming on line or up for final investment decisions.
Close to a tenth of the LNG fleet is also ripe for scrapping, so shipping firms are bound to take capacity off the market if prices ease significantly.
"LNG is simply in high demand. and it's not just the consequence of Fukushima," said Jon Skule Storheill, chief executive officer of Norway LNG tanker operator Awilco LNG . "There's Korea, there's Taiwan, this market is just strong. Gas is clean, it's available and it's cheap."
Short-term charter rates reached a peak of $160,000 per day in recent months, due in great part to a jump of around 12 percent in Japanese gas demand as the country replaced nuclear capacity shut after last year's earthquake and tsunami.
Rates have since eased back to the $125,000-$140,000 range, still an astronomical figure compared with $37,000 in 2010.
"We may not see it going back to where it's been. The $150,000-$160,000 level was probably the peak, but that doesn't mean it will fall as the market will remain tight for at least the next 18 months," said Andy Flower, an independent energy consultant.
Newly built vessels will ease some of the price pressure but add to charter rate volatility.
Two-thirds of the vessels on order are uncommitted, a big change for an industry used to low-risk, long-term commitments, says Peter Illingworth, a managing director for DVB Bank SE.
"What's new is the ordering of the vessels on a flexible basis without any fixed route and many of those vessels which have been ordered without any fixed route also don't have charters yet," Illingworth said.
The rising popularity of short-term charters and the increasing role of brokers also force the rest of the sector to cut charter periods and move to shorter contracts, said Patrick De Brabandere, chief operating officer of Belgian natural gas shipping company Exmar.
Brokerage Carnegie estimates that LNG shipping capacity utilization will jump to 98 percent this year from last year's 90 percent and remain in the 96-98 percent range through 2015.
U.S. GAS GLUT
The market's longer-term outlook is clouded to a great extent by the U.S. gas glut, which pushed U.S. gas prices below $3 per mmBtu, a bargain compared with the Asian spot price of $15 per mmBtu .
That is pushing gas firms to find ways of getting the gas offshore. Seven export plants are proposed to come online within the next three to five years, a potential huge opportunity for LNG shipping firms.
"There's a huge potential in export from 2016 onward. Even just one or two (projects) would be a shift in the market," said Brian Tienzo, chief financial officer of Norway's Golar LNG .
In 2012, traded volumes are seen rising by 6 to 8 percent while shipping capacity is broadly unchanged as scrapping offsets new vessels coming on the market, although operators may be tempted to extend vessel lifespans.
Pareto Securities sees a need for an additional 175 vessels by 2020, while Fearnley Fonds, which specializes in the shipping sector, said at least this many would be needed by 2017, with the figure rising to 220 if all planned capacity comes online.
Newbuild orders total just over 60, so by any calculation, over a 100 more vessels must be ordered just to keep the market's precarious balance.
"Nine percent of the fleet is very old and ripe for scrapping, so if you see rates come down, many of those vessels will be pulled from service," Maria Bitri, an LNG shipbroker for Clarksons said.
The big risk to shipping firms is production delays.
"LNG carriers have always been delivered on time and on budget, and history shows liquefaction is always a bit late," Sveinung Stoehle, chief executive of Hoegh LNG said.
Indeed, the two big projects due to come on stream in 2012 - Australia's 5.7 bcm per year Pluto export terminal and Angola's 5.2 bcm per year terminal - have both faced or are expecting potential delays.