Deals to charter LNG carriers could be made at rates as high as one million dollars per day this winter, according to London-based shipping consultancy Drewry. “This market is on fire right now and we expect a lot of records to be broken,” said Drewry Maritime Research senior lead analyst in gas shipping Aman Sud told a webinar. He said such extraordinary rate forecasts reflected the shortage of promptly available LNG carriers available for charter on the spot market. LNG carrier spot rates for Atlantic trading were today assessed at just under $340,000 per day, according to the Baltic Exchange, up 48% in one week and four times levels at the beginning of September.

Europe’s energy crisis is generating profits of more than $130m per LNG cargo delivered to the continent as a chaotic and disrupted gas market motivates traders to retain tonnage via longer-term charters rather than sub-let, as well as idle vessels to ensure they are available when needed. “Deals haven’t reached the $1m-a-day mark so far,” Mr. Sud told Lloyd’s List. “The figure is the expectation of what rates can reach during the winter with the LNG spot (price) above $60 per MMBtu, with ballast bonus and positioning fee added to the cost. “So far, the highest deal done is by Shell which has paid $400,000 per day for Yiannis (IMO: 9879674), while GAIL (India) chartered LNG Schneeweisschen (IMO: 9771913) for $360,000 per day.”

The webinar chronicled an unprecedented winter for LNG shipping, with the very tight market extending into 2025 as European demand continued to climb. Daily rates for the global fleet of around 650 LNG carriers trading would average between $365,000 and $980,000 per day depending on engine type, over the seasonally strongest fourth quarter, according Drewry’s base case. In the consultancy’s highest case, average rates topped $400,000 per day, and some individual charters could surpass a million dollars per day, said Mr. Sud. The lowest average estimate was for the oldest steam turbine LNG carriers and the highest for modern ships with low-pressure dual-fuel engines. Newbuilding prices for LNG carriers are at a record $250m-plus per vessel, gaining 25% in value during the past nine months, with no slots available at shipyards until 2026, according to Drewry. Demand for newbuilding resales would drive prices as high as $260m to $270m, Mr. Sud said.

The LNG carrier orderbook stood at 285 vessels, with 186 alone ordered this year and the fleet-to-orderbook ratio now at 43% based on the consultancy’s estimates. Current market conditions have upended normally stable LNG trades, expected to reach 395 MMT in 2022, up 6%. Base case forecasts had trade rising to 407.3 MMT in 2023 and 428.1 MMT by 2024. Japanese, Chinese or South Korean energy suppliers that were supplied LNG under long-term, oil-linked pricing deals are reselling to European buyers over the third quarter, generating hundreds of millions in profit, and adding to tonnage capacity shortfalls. European purchases of LNG to boost storage capacity were tallied at $55bn in 2022 so far, as cargoes replaced Russian natural gas imports that now supply 10% of regional demand, compared with 40% last year.

A dozen LNG carriers are tracked at anchor off Malta and near Gibraltar, or the Suez Canal, as traders waited for gas price gains to take advantage of price arbitrages available in Europe and Asia. Asia’s LNG imports dipped in the first seven months of the year, with China down 20% alone, Drewry figures showed. Europe, including Türkiye, accounted for about 20% of all LNG imports in 2021, while Asia is the biggest buyer, at 70% of trade. Falling Asia demand this year has been offset by European imports which climbed by 118% from Belgium, 91% for Netherlands and 60% for the UK.