LNG shipping market primed for growth after scramble for supply

GasLog Partners LP

05/03/2021 12:39

By Jonathan Saul
    LONDON, March 5 (Reuters) - Liquefied natural gas (LNG)
ships are set to receive an earnings boost from restocking
demand after colder conditions drove a scramble for supplies and
record high freight rates, a top LNG tanker player said.      
    A cold snap in Europe and Asia in January and in North
America last month increased heating demand, prompting prices to
jump in several markets, while inventories fell.  urn:newsml:reuters.com:*:nL2N2L12PT
    "You need to replenish stocks because of the cold northern
hemisphere winter in both Asia and in Europe. So, we think this
is going to add to tonne miles," GasLog Partners  GLOP.N  chief
executive Paul Wogan told Reuters.     
    Tonne miles are an indicator of shipping demand, measuring
transported cargo volume multiplied by distance.
    LNG tanker rates in January hit record highs of over
$320,000 a day, with some charters concluded at around $350,000
a day, estimates from shipping sources showed.  urn:newsml:reuters.com:*:nL1N2JN2PE
    Average earnings have fallen to around $20,000 a day on some
routes, Baltic Exchange data showed.
    Wogan said despite more tankers being delivered in 2021,
rates could be "somewhere between $5,000 a day better than they
were at last year". 
    "We think there's going to be about 20 million tonnes more
LNG moved this year than last year," he said, adding that much
of the additional production would come from U.S. producers.
    Data from broker EA Gibson, based on AIS ship tracking,
showed 14 LNG vessels had already been delivered this year with
a further 44 scheduled to hit the water in 2021, which will add
to the existing LNG fleet of 593 tankers.     
    Wogan declined to comment further on the agreement by
subsidiary company GasLog Ltd to be taken private by BlackRock
 BLK.N , the world's largest asset manager. 
    Gaslog Ltd's chairman Peter Livanos said last week the deal
would allow "for access to growth capital currently absent in
the public equity markets".

 (Editing by Barbara Lewis)
 ((jonathan.saul@thomsonreuters.com; + 44 207 542 4357 ; Reuters
Messaging: jonathan.saul.thomsonreuters.com@reuters.net))