In spite of low gas prices due to ample LNG supply growth and muted demand so far in 2019 spot shipping rates have gradually increased over the last few months and are currently about USD 70,000 per day on average, said Awilco LNG Group.
According to Norwegian LNG transportation provider, European gas storage nearing full capacity coupled with a consistent contango across the LNG price curves for contracts delivering over the rest of the year supports sending US LNG to Asia.
A handful of vessels have already been employed on storage plays over the next few months. Consolidation discussions with other ship owners are still ongoing, however due to the current capital market conditions the timing and outcome of these discussions is unclear.
100 MTPA of new LNG production capacity under construction is expected to start up the next five years. Tonnage demand and supply appear balanced the next few years. However, periods of volatility and seasonality should be expected.
The current low gas price is expected to trigger further growth in the share of gas in the global energy mix. Several new LNG production plants are expected to be sanctioned in the near future to meet the growing demand for gas, estimated at double the growth rate of the total global energy demand according to Shell Energy Outlook.
Awilco LNG has one vessel on contract until March 2020 and from mid-September 2019 one vessel available and is well positioned in this firming market.
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