The rush to secure natural gas supplies is resulting in a shortage of seaborne vessels, forcing companies to pay record-high rates to transport liquefied natural gas (LNG) to Europe. According to Bloomberg, Shell booked a ship at the equivalent of 400,000 US dollars per day to carry US gas.
Atlantic LNG freight rates have increased significantly since the beginning of the war as Europe is in a hurry to replace Russian pipeline flows with alternative supplies and buyers are booking all available vessels ahead of winter. The shortage of seaborne vessels is forcing companies to pay record-high rates to transport LNG to Europe.
According to Bloomberg, Shell booked the Yiannis to load a US cargo at the end of October for delivery to Europe at a rate equivalent to 400,000 US dollars per day on a round-trip basis, which is likely the most expensive ever for the Atlantic basin. Not far behind was GAIL India, which booked the LNG Schneeweisschen to load cargo in early November from the US at about 360,000 US dollars per day.
The recent leaking from the ruptured Nord Stream gas pipelines only worsened the situation as European countries are trying to acquire as much liquefied natural gas as possible from the world market.
Today, short-term LNG shipping rates are in record territory, not just for LNG shipping but for any commercial shipping sector and these rates are expected to keep climbing. Additionally, the worsening energy crisis also creates a shortage of floating storage and regasification units (FSRUs) causing rental rates for specialised tankers to double.