Spot charter rates for LNG carriers have moved above $200,000 per day, as charterers move to extend period deals and secure tonnage on longer hires.

Brokers and shipowners reported Shell as paying around $200,000 per day for the 160,000-cbm Palu LNG (built 2014). The roundtrip economics on the vessel, which is a relet from trader Trafigura, are said to stack up at closer to $230,000 per day.

Osaka Gas is reported to have relet the 160,100-cbm Corcovado LNG (built 2014) to BP on a prompt basis at a rate of about $200,000 per day for a spot loading from the US Gulf.

Both ships are tri-fuel diesel-electric vessels, which suggests that levels for larger, more modern ME-GI and X-DF gas-injection ships will be higher.

Many eyes are on Indian Oil Corp's tender for a vessel to lift a spot cargo from the US around 11 to 13 December, where observers expect to see a high rate paid.

The Baltic Exchange LNG rate estimates were relatively static today, with minor tweaks up and down.

But brokers flagged up the increase in activity to take LNG carriers on period hire, with up to six fresh requirements in the market and existing charterers moving to extend contracts on ships they took on one-year charters earlier this year.

They said this is adding further tightness to the winter market.

On the long-term requirements, owners said India's Gail is in the market for tonnage to take on charter for five years.

In China, ENN is looking to fix LNG carriers for up to 13 years after securing volumes from Cheniere Energy in the US. The company is asking for offers on ships that could be fixed for a period of 10 firm years, with an option of a further three or eight years with an extension on five more.

Further upside

Two ships transit the Cocoli Locks on the Panama Canal, which posted a record number of transits of LNG carriers in January 2021. Photo: Panama Canal Authority

Brazilian charterer Petrobras has floated a requirement for a vessel to charter in for three years.

Existing charterers have also been seen extending the hire on vessels.

"Spot shipping rates have taken a sharp upwards trajectory, exceeding $200,000 per day," Rystad Energy said in the first of its weekly gas market reports.

The analyst said there is further upside potential for rates, given the willingness of the market to pay for freight rates to capture the $25-per-MMbtu arbitrage between delivered US cargoes and spot prices in Asia and Europe, as well as the likelihood of congestion at the Panama Canal.

"Market participants with excess shipping capacity ... may be positioned for windfall profits this winter, similar to what we saw in January 2021," Rystad said.

In its weekly report, shipbroker Howe Robinson Partners highlighted that many of the open LNG carriers are being offered warm.

It said this is a function of the high gas prices and the desire to deliver maximum cargo volume leaving little or no heel to keep vessels' tanks cool.

Howe Robinson said that when a vessel is redelivered at a discharge port, owners want to ballast on the cheapest fuel, which right now is heavy fuel oil.