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Global Gas Ship Shortage Sends Vessel Rates Surging To Record
Dr.G.R.Balakrishnan Oct 06 2022 Shipping News

Global Gas Ship Shortage Sends Vessel Rates Surging To Record

Buyers are snapping up all available vessels as demand for gas increases with winter approaching, and refraining from releasing any back into the market in case they’re needed for any supply at short notice. 

A rush to secure natural gas is resulting in an acute shortage of seaborne vessels, forcing companies to pay record-high rates to transport the fuel to Europe.

The continent is racing to replace Russian pipeline flows with liquefied natural gas from suppliers including in the US and Nigeria. But there are few ships available through the rest of the year, presenting a new risk to global gas supply this winter.

Shell Plc booked the Yiannis to load a US cargo at the end of October for delivery to Europe at a rate equivalent to $400,000 per day on a round-trip basis, said traders. The deal is likely the most expensive ever for the Atlantic basin, according to traders and brokers.

GAIL India Ltd. also booked the LNG Schneeweisschen to load a cargo in early November from the US at about $360,000 per day, said traders. The company, which recently sold an LNG shipment from its Cove Point export facility, chartered the vessel from a European utility company, they said.

Atlantic LNG freight rates have increased over 300% in one month as participants look to secure the last remaining vessels ahead of winter,” said Tim Mendelssohn, chief executive officer of Spark Commodities, which takes spot freight assessments from LNG shipbrokers.

The rally in energy prices this year has been a boon for tanker ship-owners, who are seeing the cost of transporting everything from diesel to petrochemical feedstock reach new highs.

 Buyers are paying up to avoid being left stranded without supply if it gets unusually cold this winter, said traders and shipowners.