Drewry: US sanctions bump LNG shipping rates

first_imgIllustration purposes only (Image courtesy of DSME)Tight vessel supply and seasonal firmness in demand have pushed LNG shipping rates to $130,000/day from $80,000/day at the end of September. Furthermore, the upward momentum in rates is expected to be maintained in the fourth quarter of 2019 due to a reduction in the availability of vessels in the spot market, driven by several factors including US sanctions on COSCO-linked LNG vessels, a rise in LNG demand, vessels being used for floating storage and typhoons causing delays in China and Japan, the shipping consultancy Drewry said.The LNG shipping market, which had been reeling under a long spell of low charter rates in the first three quarters of 2019, finally came to life when a combination of factors worked in tandem to squeeze the vessel supply, Drewry said.First, the US sanctions on COSCO-linked LNG vessels forced charterers to find replacement vessels from the spot market, reducing the prompt availability of vessels.Moreover, the ongoing contango in LNG prices has resulted in a sudden jump in floating storage levels in Asia, further reducing the vessel supply in the market. In addition, typhoons in China and Japan have affected vessel offloading in the region.Adding fuel to the fire, high LNG inventories in Europe have caused LNG vessels to either slow steam or delay deliveries, absorbing more vessels from an already tight fleet.On 25 September 2019, the US imposed sanctions on Chinese shipping companies – COSCO Shipping Tanker (Dalian) and COSCO Shipping Tanker (Dalian) Seaman and Ship Management for allegedly transporting Iranian oil on their tankers despite the sanctions on Iran. In the same line, 12 COSCO-linked LNG carriers were also blocked from trading. The resultant reduction in vessels has triggered LNG charter rates over the last two weeks, Drewry said.Among the 12 vessels, six Arc-7 class LNG carriers (with a combined LNG-carrying capacity of 1 million cbm) under the 50-50 Yamal LNG joint venture between Teekay LNG and China LNG Shipping (50 percent owned by COSCO) were blocked. This lead to a setback to the Russian LNG exports which are dependent on the ice-breaking capability of these vessels during winter.The remaining six LNG carriers linked to COSCO were on charter with China National Offshore Oil and Gas Company (CNOOC), which is now seeking to replace the carriers on an immediate basis, which will further deplete the prompt vessel availability, causing a surge in rates.As a measure to weather the storm, Novatek’s Yamal LNG project is seeking to use Norway or Murmansk as transshipment hubs to fulfill its contractual obligations.Furthermore, ongoing weather delays caused by typhoon Hagibis in China and Japan have resulted in a Chinese-receiving terminal being shut down and causing offloading delays in Japan and limiting vessel availability.The market is facing scarcity of prompt vessels at a time when LNG trading has started to rise ahead of peak winter heating demand. Drewry expects many Asian countries to increase their LNG imports in the fourth quarter of 2019, with expectations for a colder winter this year.Increased demand expectations have also spurred forward LNG prices, leading to a rise in the use of LNG carriers as floating storage. Higher LNG forward prices have also given an incentive for LNG carriers to take longer voyages and diversions to avoid quick deliveries, further contracting vessel supply.In addition, upcoming liquefaction capacity through Elba LNG T1-5 (1.5 mtpa) in the US, Vysotsk T2 (0.6 mtpa) and Yamal LNG T4 (1.2 mtpa) in Russia will further provide an impetus to keep shipping rates high in the fourth quarter of 2019.LNG shipping rates have gradually increased on the BLNG1 Index (the Gladstone-Tokyo route) to stand at $132,900/day on October 11 from $61,100/day on September 24 (before the sanctions), up by 117 percent.In the near term, vessel availability is unlikely to increase. Therefore, Drewry projects TFDE rates for a 170,000 cbm vessel to breach the $200,000/day mark in the short term, while steam turbine rates will cross the $100,000/day mark.Overall, we expect high demand and tight vessel availability to keep shipping rates high in the range of $150,000/day – $200,000/day in the fourth quarter 2019.last_img read more

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The best in the world! Mourinho backed by Terry as Chelsea insists club is united

first_img1 John Terry and Jose Mourinho Chelsea captain John Terry has reiterated his backing for Jose Mourinho, hailing him the ‘best manager in the world’.Mourinho’s future at Stamford Bridge has been called into question after a disastrous start to the season for the Premier League champions.Reports of fall-outs with senior stars, including Terry, dominated the back pages in the midst of Chelsea’s woeful run of form.But the defender maintains that Mourinho has always had the full support of the dressing room and hopes successive clean sheets are the catalyst for a turnaround in fortunes.Terry, who played in the 2-0 win over Aston Villa at the weekend and in Tuesday’s goalless draw with Dynamo Kiev, said: “We are a great side and we will get there with the hunger and the ambition that is in the squad.“You don’t win trophies year after year without that hunger in the belly. We are collectively together, the players, the manager and the fans and we will be all right.“When the chips are down, I’d take this squad over any. I know the players very well. I’ve been in this situation before, I’ve seen it happen.“We’ve got a great squad of players. More importantly we’ve still got the best manager in the world.“Everyone’s fully behind him. There’s stories and this and that and everything else, but believe me everyone’s together.“The fans were unbelievable again at the weekend, so (I) thank them.”last_img read more

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first_imgGreat day for the Outdoors today across Donegal. Picture by Annemarie McGowanIT’S the weather we’d loved to have had in August – but we won’t complain after forecasters said Donegal will have another glorious week of warm, dry and often sunny weather.In fact West is Best over the next week, says Met Eireann.Over the coming week, high pressure will continue to dominate the weather over Ireland and it will continue mainly dry and settled, said the forecaster. Sunday night will be dry with mist and fog developing in many areas overnight. Lowest temperatures of 8 to 11 degrees.Said a spokesman: “From Monday to Friday inclusive, the weather will continue mainly dry with just the risk of a few isolated showers at times. The days will start off with patches of mist and fog in many areas.“These will clear and bright or sunny spells will develop. Light to moderate east to southeast breezes will persist and it will be hazy at times. Day time temperatures will range form 17 to 20 degrees on Monday and Tuesday and they’ll range from 18 to 22 degrees on Wednesday, Thursday and Friday. It will be coolest along the east coast and warmest in the west.“Mist and fog will form at night and will become dense in some inland areas. Night time temperatures will mostly range from 9 to 13 degrees.” Current indications suggest a greater risk of some rain at times next weekend….Enjoy it whilst it lasts. ANOTHER GLORIOUS WEEK OF WEATHER AHEAD FOR DONEGAL, SAY FORECASTERS was last modified: September 14th, 2014 by John2Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Reddit (Opens in new window)Click to share on Pocket (Opens in new window)Click to share on Telegram (Opens in new window)Click to share on WhatsApp (Opens in new window)Click to share on Skype (Opens in new window)Click to print (Opens in new window) Tags:beachdonegalsunshineweatherlast_img read more