New York-listed LNG carrier owners posted gains on Friday following US efforts to help wean the European Union off Russian natural gas.
John Fredriksen-backed Flex LNG jumped $2.74, or 10.5%, to $28.78, while Hoegh LNG Partners added $0.74 to close at $6.22, a 13.5% rise.
Dynagas LNG Partners added $0.49, leaping more than 16% to finish the week at $3.50.
The gains come on the day Washington and Brussels confirmed a plan first reported on Thursday that the US will supply Europe with 15bn cbm of LNG this year as the EU looks to slash its Russian LNG imports by two-thirds by the end of the year and completely by 2027.
Reacting to Russia’s invasion of Ukraine last month, the EU seeks to replace Russian LNG with cargoes from other sources and renewables. Russian LNG makes up roughly one-third of all EU imports.
The plan calls for the US to send 50bn cbm of LNG to Europe annually by 2030, a total Evercore said was more than one-third of all US LNG exports.
Analyst Sean Morgan suggested federal financing could be on the way for LNG projects to reach the 50bn cbm goal, as many question how the US can pull off such an expansion of capacity.
He said the expansion would be “a boon to the entire US oil and gas industry”, including companies that move the cargoes.
Morgan also said the lack of spot cargoes is being overcome by Japanese utilities re-selling LNG to Europe and traders willing to pay penalties to reroute cargoes there.
“Europe has been paying premiums for gas that have encouraged private companies to redirect previously contracted gas to Europe to make money on the wide arbitrage spread,” he said.
