Atlantic LNG: TFDE day rates slip

Spot charter day rates for tri-fuel diesel-electric (TFDE) LNG carriers eased on Monday in the Atlantic basin amid increased vessel availability in the region.

West of Suez TFDE rates fell to $120,000/d on Monday from $123,000/d at the previous close and narrowed their premium to rates in the Pacific basin, which were unchanged at 115,000/d. Vessel availability increased in the basin after a number of carriers that were being used as floating storage units unloaded their cargoes in early November. There were still nine vessels being used as floating storage in the Atlantic on Monday, market participants said, down from more than 30 in late October.

A contango structure in both European and Asian prices provided an incentive for firms to delay until November the delivery of cargoes loaded in late September or early October, which tightened the shipping market and bolstered charter rates in both basins in recent weeks.

Tighter time spreads in both curves may have reduced the incentive to store LNG and delay deliveries, compared with recent months. The TTF December-January spread was minus 21¢/mn Btu on Monday. The November-December spread at the Dutch hub stood at minus 96¢/mn Btu on 31 October, compared with 53¢/mn Btu at the beginning of October. And the TTF October contract had closed $1.66/mn Btu below the November contract on 30 September, having expanded its discount from $1.11/mn Btu on 2 September.

Some fixtures were also heard below prevailing market values. Shell was said to have fixed the 152,000m³ Seri Balqis at $110,000/d, possibly in a swap with Japanese utility Osaka Gas's fixture of the 177,300 m LNG Juno, market participants said. The two firms may have been able to make substantial savings on repositioning costs as part of the deal, some said. The Seri Balqis unloaded a Corpus Christi cargo at Milford Haven in the UK on Sunday and was plotting a course back across the Atlantic, while the LNG Juno was due to dock at the 7.8mn t/yr Gladstone facility in Australia on 18 November after unloading another Australian cargo at the Ningbo-Zhoushan terminal in China. Osaka Gas has offtake from the 5.15mn t/yr Freeport LNG facility, which was expected to start commercial operations in December.

Italian energy firm Eni was heard to have chartered the 138,000m³ Cadiz Knutsen, which has a steam turbine engine, at around $90,000/d to pick up a cargo from the 7.2mn t/yr Idku terminal in Egypt later this month. The vessel reached France's Fos-sur-Mer on Monday with a Nigerian cargo.