ShareLNG ship shortage hurts new players
A lack of available liquefied natural gas (LNG) tankers helped push charter rates up this winter and continues to hamper trade for smaller players without access to tonnage, according to shipper Golar LNG (GLNG). Large increases in Asian demand and new projects coming online have shrunk the number of available tankers in recent months, making it difficult to secure short term deals.
Golar emphasizes that shipping challenges are making it difficult for new entrants.
According to ship broker Fearnleys LNG, there was about one tanker available for charter at the beginning of the year, down from about 15 last summer. Conversely, shipping rates doubled from less than USD 30 000 a day to over USD 60 000 over the same period. Some deals fell through in 2010 after parties failed to secure a ship after winning an LNG supply tender. Golar highlights that vessel availability has now reached a level of tightness not seen in the market for several years.
A whole string of new trading players like banks have entered the LNG market over the last couple of years, looking to make the most of growing production and increased trading opportunities. But spot tenders have been won almost exclusively in recent months by major players with their own fleets. New players have been limited to more peripheral, riskier trades like re-exporting cargoes from the US Gulf to Europe and Asia.
One cause of the shipping shortage is an increase in tanker chartering by top exporter Qatar to increase its flexibility. Analysts say that the large tankers built by Qatar, which were intended for shuttling LNG to US terminals, are not suitable for other smaller terminals now that shale gas has reduced US import needs.
Recently, Waterborne LNG analysts said that Qatar, which is already chartering up to 10 tankers this year — up from about five last year — had chartered two more vessels from Excelerate Energy while it retrofits some of its own tankers to run on LNG boil-off.
Golar emphasizes that shipping challenges are making it difficult for new entrants.
According to ship broker Fearnleys LNG, there was about one tanker available for charter at the beginning of the year, down from about 15 last summer. Conversely, shipping rates doubled from less than USD 30 000 a day to over USD 60 000 over the same period. Some deals fell through in 2010 after parties failed to secure a ship after winning an LNG supply tender. Golar highlights that vessel availability has now reached a level of tightness not seen in the market for several years.
A whole string of new trading players like banks have entered the LNG market over the last couple of years, looking to make the most of growing production and increased trading opportunities. But spot tenders have been won almost exclusively in recent months by major players with their own fleets. New players have been limited to more peripheral, riskier trades like re-exporting cargoes from the US Gulf to Europe and Asia.
One cause of the shipping shortage is an increase in tanker chartering by top exporter Qatar to increase its flexibility. Analysts say that the large tankers built by Qatar, which were intended for shuttling LNG to US terminals, are not suitable for other smaller terminals now that shale gas has reduced US import needs.
Recently, Waterborne LNG analysts said that Qatar, which is already chartering up to 10 tankers this year — up from about five last year — had chartered two more vessels from Excelerate Energy while it retrofits some of its own tankers to run on LNG boil-off.