Charterers reassess shipping position amid tight LNG supply
Charter interest in the prompt shipping market has slowed as a result of the fundamental lack of marginal LNG supply, shipping sources told ICIS on 12 February.
While ship owners were heard to be raising offers of available tonnage to no less than $130,000/day on the back of rising LNG prices, ship brokers were sceptical that there would be sufficient LNG volumes in the market to allow for new sub-charter fixtures.
The tight global picture brought about by supply issues in Egypt and maintenance at the Snøhvit LNG plant in Norway has been compounded by a force majeure on all Nigeria LNG (NLNG) cargo loadings. Anglo-Dutch major Shell is said to have at least one vessel open near West Africa as a result of the production shortfall that led to the NLNG force majeure.
Meanwhile, other portfolio suppliers that lift volumes from NLNG, such as BG Group and Italy's Eni, may also be in the same position, sources said.
The total number of open vessels that would have otherwise picked up cargoes from Nigeria, however, may still be limited with the potential charter length and the business opportunities for any of those vessels uncertain.
Shipping sources expect open periods to be no longer than a six weeks at most.
"It depends on the ability of NLNG offtakers to cover their supply positions from elsewhere," one broker said.
If a supplier can use another ship in its fleet to cover for the lost NLNG volumes then vessels it had originally planned for NLNG train 4 and 5 offtake could be available to the market in the short term.
However, some portfolio suppliers without that flexibility may not have the right vessels in the right positions to cover effectively for the NLNG shortfall. These market participants could therefore be the first to sub-charter additional tonnage but if this is the case, vessels open in West Africa would rank near the bottom in terms of charter suitability because of repositioning costs.
This may leave some scope for shipping optimisation to occur between suppliers that can arrange cargo or vessel swaps.
In the Pacific basin, the 145,580 cubic metre (cbm) Grand Elena is understood to have gone to Malaysia's PETRONAS for a single voyage from Bintulu to Japan.
While some brokers said the sub-charter of the Moss-type vessel would be around $120,000/day, it could also have been part of a swap arrangement. Russia's Sakhalin Energy - the project associated with the Grand Elena - had earlier transferred its 147,710cbm Fuji LNG to Tokyo Gas over the winter period as part of a vessel swap, which saw Sakhalin secure the operatorship of the 144,607cbm Energy Navigator.
Elsewhere, with Qatar seen as the only real source of marginal global LNG supply, the two Qatari consortia could also step in to take extra ships. The 149,730cbm Ob River and 150,900cbm Expedient are both thought to have been sub-chartered by either Qatargas or RasGas to deliver to Japan over the coming week.
Production problems in Nigeria has eradicated the previously held premium for flexible Atlantic basin vessels.
The ICIS prompt charter rate assessment for Atlantic and Pacific basin vessels has now been equalised at $126,000/day.
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