LNG long-term tanker rates hit record high

Tue Jan 17, 2012 7:55am EST

* Spot rates more than five times mid-2010 level

* Golar's $137,000/day, 3-year lease sets new record

* Asian demand, Argentine tender keeps rates high

By Oleg Vukmanovic

LONDON, Jan 16 (Reuters) - Liquefied natural gas (LNG) spot tanker rates have climbed to $150,000 per day this month as growing import needs from consumers in Asia and South America reduce numbers of available vessels, brokers said.

"The LNG freight market is currently quite strong due to increasing LNG demand in both Europe and Asia and less availability of prompt available tonnage," LNG shipping analyst Pranay Shukla at Drewry Shipping Consultants said.

"Short-term freight rates in December 2011 averaged at $125,000/day, up from $68,000/day averaged in December 2010," he said in a note via email.

"There are reports that short-term freight rates have strengthened further over the December figures, with vessels now fixed in the range of $150-155,000/day," he added.

Norwegian shipper Stena Bulk extended the leasehold on its two 2011-built Stena Clear Sky and Stena Crystal Sky tankers for a further four years, securing a rate of $140,000/day, Drewry said.

The past two years of rising demand for LNG shipments have boosted tanker earnings by more than five times compared with the rate in mid-2010 and are expected to remain strong throughout this year, shipping brokers said.

While charterers may find some shelter from sky-high rates in 2013 as shipyards add 14 vessels to the global fleet, over the next 12 months just two tankers are scheduled to hit the water.

Long-term charter rates also set a new record on Friday at $137,000/day, further underlining the scale of demand as importers scramble to secure shipping capacity.

The all-time high was set after Golar LNG agreed to lease one of its modern tankers to a major Japanese energy firm for three years from March, boosting the company's second-quarter earnings.

Japanese trading house Marubeni has fronted the charter on behalf of Tokyo Electric Power Co (TEPCO), which has a three-year deal to import LNG from Abu Dhabi, trade sources said.

Long-term rates are discounted to the spot market to reflect the 50 to 60 new tankers that are expected to start operating over the next three years, which should ease shortages and lower the cost of chartering.

According to several shipping brokers, Golar is targetting a spot rental rate of $200,000 per day.

On top of booming demand in Asia, a recent tender by Argentina for 80 cargoes through 2012 has helped to drive tanker rates higher, a broker said.

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