Spot charter rates for steam-turbine LNG carriers have soared to over $200,000 per day as the hunt for elusive tonnage continues among charterers in a market devoid of open ships.
Brokers are linking energy major BP to steamship tonnage being relet by Equinor on one of the Norwegian energy company so-called "Arctic" vessels which normally serve the currently shutdown Snohvit LNG plant in Hammerfest.
BP is said to be paying a rate of around $200,000 per day for the vessel to lift an early-December loading cargo out of the US Gulf.
Details of the business are only just starting to emerge and it is expected this headline figure will be based on a round-trip voyage and include positioning costs.
Rates for both two-stroke, gas-injection vessels and tri-fuel diesel-electric ships are now being quoted as firmly over $200,000 per day.
Relet central
Brokers said Equinor has been active in reletting these steam vessels in the last few weeks but rates have risen sharply in the interim.
The company is reported to have fixed out the 147,000-cbm Arctic Princess (built 2006) to Kogas to load a cargo from the Prelude FLNG unit in early December at a rate of around $165,000 per day.
The 142,900-cbm Arctic Voyager (built 2006) was also reported fixed to Socar Trading for a US Gulf cargo at a rate in the $90,000-per-day range.
These steam vessels and others like them are attracting top-dollar rates despite being the oldest and least efficient vessels in both the LNG and global fleet.
They are also among the first vessels which are expected to face compliance hurdles with the incoming Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII) regulations from 1 January 2023.
But the lack of available tonnage is pushing charterers to move on any open vessel to give themselves cargo cover.
"Regardless of EEXI, steam engines haven’t been this popular since James Watt invented the separate condenser in 1769 with steam-fuelled LNG ships now cruising above the $200,000 mark in the spot market," one shipowning wit said.
Backbone
Aside from the steamship rate chatter, brokers said the LNG spot market has been quiet this week while term business has been very busy.
One described the market has a "really active" feel to it this year.
He spoke about there being "more backbone" to the activity this year, suggesting the strong rate environment was likely to be more protracted.
But he added that there are not enough ships available for it to go crazy.
Vessel relets have become the dominant tonnage for spot chartering this winter.
But several brokers said charterers are starting to pull back from offering out their ships as the colder months and season of higher shipping demand kicks in and the arbitrage reopens between the west and east.
One said there are now "pockets of availability" of relets, rather than charterers actively looking to offer out their vessels.
They comment that the outlook for shipping into the latter part of January and beyond will largely depend on the severity of winter temperatures this year.
