LNG Tanker Rates Surge to Record as Asia Buys More U.S. Gas

Australia to Japan costs five times higher than two months ago Shipping crunch may worsen if U.S. has winter supply outages

LNG - Carrier - ENB

Spot freight rates for liquefied natural gas tankers in the Asia-Pacific have surged to record highs as a steady flow of U.S. cargoes to the region boosts demand for ships.

The cost of chartering a vessel to carry a shipment of the super-chilled fuel from Australia to Japan spiked to $316,750 per day on Tuesday, five times higher than two months ago, according to data from Spark Commodities. That beats the previous high in January during a cold snap in Northeast Asia.

The jump comes in the run-up to the peak winter consumption season and is spurring concern among Asian buyers that colder-than-normal temperatures could be exacerbated by the shortage of ships, pushing costs of the electricity feedstock even higher. Asian benchmark LNG prices are currently about $39 per million British thermal units. That’s down from a peak above $56 in early October, but above the high last winter.

Asias Shortage of Gas Ships -ENB

“There has recently been more demand in Asia for U.S. LNG, but that also means more demand for ships to bring LNG to the Pacific,” said Joseph Sigelman, chief executive officer of AG&P Group. “The situation for ships will remain tight through the rest of winter.”

Inpex Corp.Kyushu Electric Power Co. and PTT International Trading signed a memorandum last month to collaborate on LNG trading and hiring gas tankers to optimize their operations amid the dearth of ships.

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Stuart Turley is President and CEO of Sandstone Group, a top energy data, and finance consultancy working with companies all throughout the energy value chain. Sandstone helps both small and large-cap energy companies to develop customized applications and manage data workflows/integration throughout the entire business. With experience in implementing enterprise networks, supercomputers, and cellular tower solutions, Sandstone has become a trusted source and advisor in this space. Stuart has led the “Total Corporate Digital Integration” platform at Sandstone and works with Sandstone clients to help integrate all aspects of modern digital business. He is also the Executive Publisher of www.energynewsbeat.com, the best source for 24/7 energy news coverage and is the Co-Host of the energy news video and Podcast Energy News Beat. Stuart is on Board Member of ASN Productions, DI Communities and A Million Thanks Stuart is guided by over 30 years of business management experience, having successfully built and help sell multiple small and medium businesses while consulting for numerous Fortune 500 companies. He holds a B.A in Business Administration from Oklahoma State and an MBA from Oklahoma City University.