LNG tanker rates fall on increase in vessels

Charter rates for liquefied natural gas tankers on short-term hauls declined 17 per cent last year because of an increase in new vessels, Poten & Partners said.
Rates to rent LNG tankers fell to about US$46,600 a day for steam turbine vessels of 138,000 to 150,000 cubic metres in capacity, Poten, a US energy consultant, said in a report.
'With a record number of new builds entering the fleet, market needs were easily accommodated and except for a few instances, prompt ships were always available,' the report said.
'Despite a robust cargo market with record numbers of spot shipments being diverted from the Atlantic Basin to destinations east of Suez, chartering activity remained muted through July.'
The number of LNG ships worldwide will increase by more than 50 per cent in 2010 after shipyards delivered a record 58 vessels last year, David Fuller, the London-based head of LNG for RWE AG, said at the Gas Asia conference in Kuala Lumpur on Wednesday.
Daily charter rates in 2008 were in a range of US$40,000 to US$50,000 about 60 per cent of the time, according to the report.
Charter rates for ships transporting spot cargoes have declined to about US$35,000 to US$40,000 a day currently, Gunaseharan Ganapathy, vice-president of LNG at MISC Bhd, said on Wednesday. Charterers may have paid as much as US$75,000 a day during winter 2007, according to Drewry Maritime Services Ltd.
MISC, the world's largest owner of liquefied natural gas tankers, expects a surplus of vessels this year and next as ship deliveries precede the start up of projects and the global recession cuts Asia's demand for the fuel, Mr Ganapathy said.
LNG is natural gas that has been reduced to one-six-hundredth of its original volume at minus 161 degrees Celsius for transportation by ship to destinations not connected by pipeline. On arrival, it is turned back into gas for distribution to power plants, factories and households. -- Bloomberg