Qatar has offered two LNG carriers for lease amid a vessel crunch in the liquefied natural gas market and soaring daily rates, Bloomberg has reported, citing unnamed trading sources.
The LNG carriers are off the west coast of Africa, the report noted.
Qatar’s offer follows a massive surge in LNG tanker rates because of the traffic disruption in the Strait of Hormuz. This has seen charter rates for the vessels go from about $40,000 per day last week to as much as $300,000 per day on the route between the U.S. Gulf Coast and Europe. Rates on the Gulf Coast-Asia route have also surge by a comparable rate, from some $42,000 per day to $300,000 per day.
Earlier in the week, QatarEnergy suspended production of liquefied gas at the world’s largest plant following strikes by Iran. Restarting production could take weeks, provided that military action ends. The company then promptly issued a force majeure declaration suspending exports of the energy commodity. QatarEnergy, together with the UAE, produces a fifth of the world’s liquefied gas.
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The Ras Laffan LNG facility in Qatar was built to process gas from the massive North Field that is shared with Iran. Since the early 2010s, Qatar has dominated global LNG in a way that today’s U.S. or Australian supply can’t match in single-source volume, and the world has priced and planned accordingly.
While Asia receives the overwhelming majority of Qatari LNG, Europe is feeling the effect of the Hormuz crisis as acutely as Asia as the global market tightens, and the Asian LNG price premium over European prices soars, re-directing the available spot supply to the Asian importers.
“There’s no spare capacity in the LNG market, so the disruption could be immediate and immense,” Claire Jungman, Director of Maritime Risk & Intelligence at energy market analytics firm Vortexa, said earlier this week.
By Irina Slav for Oilprice.com
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