LNG carrier charter rates hit record highs as demand soars

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Smoke billows from the Freeport LNG plant in Quintana, Texas, U.S., June 8, 2022, in this still image obtained from social media video on June 9, 2022. Courtesy Courtesy of Maribel Hill/via REUTERS

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June 13 (Reuters) – Spot market rates for liquefied natural gas (LNG) tankers this week set annual records as traders offered vessels available to meet growing global demand for chilled gas , according to brokers.

Growing demand for LNG and buyers shunning Russian cargo and vessels during its invasion of Ukraine have led to longer-term charters, limiting the supply of vessels to the spot market, the shipbroker said. and LNG consultant Poten & Partners.

The fire that destroyed Freeport LNG’s gas processing and export terminal did not affect spot rate increases, he said. The plant is out of service at least until the end of the month. Read more

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Spot rates for transporting 160,000 cubic meters of LNG in the Atlantic Basin are $100,000 per day and $85,000 per day for Asia or east of Suez, the official said. Poten’s economic intelligence, Jason Feer.

Both prices are up substantially from the average for the year, with an annual average for Asia of $49,000 per day. Daily rates bottomed out in March and have been very high since May.

“There has been a substantial increase in long-term charters,” Feer said, pulling capacity from the spot market. “We’ve seen 10-year-old charters that we haven’t seen in many years,” he said, declining to name long-term charterers.

Buyers who have been caught short on transportation over the past two winters have turned to long-term charters. Fewer ships will be chartered in the coming months, which will keep supply tight, he said.

“That (the Freeport LNG outage) should have had an impact. A loss of supply anywhere means a loss of demand, but we haven’t seen that,” Feer said. Instead, spot freight rates last week increased by 4% to 30% depending on vessel size and location.

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Reporting by Gary McWilliams; Editing by Mark Porter

Our standards: The Thomson Reuters Trust Principles.

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