(Commonwealth Union)_The Atlantic basin day rates for LNG carriers have risen to record highs as European countries scramble to secure natural gas supply ahead of the winter heating season. A price range often designated for the ultra-deepwater drillship industry on its finest days, shipowners who are fortunate enough to be in the LNG sector can aspire for spot rates nearing the $400,000 level. According to the most recent statistics from Spark Commodities, average prices for LNG carriers have reached $397,500 per day, up from roughly $14,000 per day in February and $80,000 in late August.
Data from the company shows that the current rate considerably surpasses the previous regional record of $300,000 per day, which was only established last week. The market for LNG transport in the area typically experiences a significant price increase around this time of year, but 2022 is different because Russia has virtually stopped supplying pipeline gas to the European Union, leaving EU consumers dependent on pipeline gas from Norway and North Africa, limited domestic production, and LNG.
The amount of LNG that can be imported into the EU is constrained by terminal capacity, but with a dozen new FSRU leases secured by the top European gas utilities, the volume is quickly increasing. According to the International Energy Agency, EU LNG imports have increased by roughly 65% for the year through August, with the majority coming from the United States. Since VLSFO bunkers presently cost around one-sixth as much per BTU as LNG, the majority of LNG dual-fuel ships have stopped using LNG and returned to using it. The same decision is anticipated to be made by industrial thermal energy consumers and dual-fuel power plants, resulting in an increase in oil consumption of around 600,000 barrels per day by the first quarter of 2019.
