21 November 2018, Sweetcrude, Lagos — Liquefied Natural Gas, LNG, shipping rates hit their highest on record this November, with several shippers heard paying $200,000 a day to transport the super-chilled fuel.
Such levels signal very little availability of vessels for December and January, according to Reuters. Rates began rising as more production came onstream and as charterers, fearing even higher costs, locked in vessels for multi-month contracts.
This is now being compounded by owners of LNG with chartered ships hanging onto the cargoes in the hope of a rise in prices. Up to 20 tankers with at least 2 million cubic metres of LNG worth $400 million are floating in Asian waters, sources said.
“All traders exposed to the freight market will think twice about moving a cargo in the spot market,” said one LNG trader. “Portfolio players with a contracted fleet will perform much better. We’ll probably see more swapping cargoes.”
There were several Japanese buyers in the market — Tohoku Electric Power Co Inc awarded a one-cargo tender to Qatar for Dec. 25-30 delivery, according to one trader.
Nippon Steel & Sumitomo Metal sought one cargo for mid-January delivery in a closed tender after sounding out the market last week. And power utility Kansai Electric Power Co was seeking two cargoes for December delivery.
Pakistan’s tender for one cargo in January and two in February was still open with bids due on Dec. 5.
Gladstone, operated by Australia’s Santos, was heard offering a cargo for Dec 12-14 delivery. Abu Dhabi’s ADNOC awarded a tender for mid-December loading.
Adding to recent new supply from Australia and Russia, Cheniere Energy produced first LNG from the U.S. Corpus Christi plant, a major milestone marking the start of the third major LNG export facility operating in the country.