LNG carrier rates fall to 15-month low

LONDON: Rates to hire liquefied natural gas carriers shipping the fuel to Asia fell to a 15-month low as the number of spot cargoes slid and delays starting an Angolan export project added to vessel supply.

Hire costs east of the Suez Canal declined 3.7% this week to US$105,000 a day, the lowest since August 2011, according to data from Fearnley LNG, an Oslo-based shipbroking unit of Astrup Fearnley. Costs plunged as much as 30% since the middle of the year because of “very limited activity,” Rikard Vabo, an analyst at Fearnley’s investment banking business, said Nov 20.

Chevron Corp, the second-biggest US energy company by market value, said Nov 2 that an Angolan LNG export project was delayed and would not produce significant volumes this year. That has boosted vessel supply, exacerbating the decline in freight rates, RS Platou Markets AS said.

Increased Asian demand for the fuel during 2011 boosted the number of LNG cargoes resold or diverted from the Atlantic. Spot, or single voyage, shipments rose by 50% to about 25% of trade that year, according to the International Group of Liquefied Natural Gas Importers.

Rates may reverse their decline because the supply of ships available for charter is shrinking and it is becoming profitable again to ship LNG to Asia from Europe. – Bloomberg