Spark: spot LNG shipping rates continue to decline

Spot charter rates for the global liquefied natural gas (LNG) carrier fleet continued to decline this week due to higher vessel availability, according to Spark Commodities.

Last week, spot LNG freight rates fell, particularly in the Atlantic basin. The Spark30S rate ended the week at $174,000 per day, while the Pacific Spark25S rate ended the week at $189,000 per day.

“Whilst spot LNG freight rates had been stronger than seasonal norms in August and September 2023, spot rates softened further this week to sit at less than half what they were last year and the Atlantic FFA forward curve is now pricing Q4 lower than recent years,” Edward Armitage, Spark’s commercial analyst told LNG Prime on Friday.

“The rate on the Atlantic Spark30 route fell $27,000 per day week-on-week to reach $147,000 per day, amid higher prompt vessel availability as floating storage opportunities for October narrowed in recent weeks in the Atlantic,” he said.

“Meanwhile, this week the Atlantic FFA forward curve switched from pricing Q4 above seasonal averages to pricing Q4 lower than recent years,” Armitage said.

The spot rate on the Pacific Spark25 route fell $20,750 per day week-on-week to reach $168,250 per day on Friday.

Spark: spot LNG shipping rates continue to decline

As per European LNG pricing, SparkNWE DES LNG front month dropped from the last week.

Last week, NWE DES LNG for October was assessed at $11.896/MMBtu, a $0.405 discount to the Ocobert23 TTF price.

“SparkNWE DES LNG for November23 deliveries was assessed at $10.489/MMBtu, a $0.685 discount to the November23 TTF price,” Armitage said on Friday.

He added that the SparkNWE basis to the TTF “held between a $0.60-$0.75/MMBtu discount to the TTF throughout the week.”

The TTF price for October settled at $11.231 per MMBtu on Thursday, while the JKM spot LNG price for November settled at $14.105 per MMBtu.

Australian LNG strike

Unions representing Chevron’s workers at the Gorgon and Wheatstone LNG export terminals in Western Australia have reportedly held meetings on Thursday and Friday and decided to resume strikes which were called off on September 22.

The Gorgon LNG plant on Barrow Island has a production capacity of some 15.5 mtpa. The Wheatstone LNG plant near Onslow has a capacity of about 8.9 mtpa.

According to the Offshore Alliance, which includes the Maritime Union of Australia and Australian Workers’ Union, Chevron has “reneged on the commitment they gave to the Fair Work Commission to incorporate the FWC’s recommendations into the Chevron EBA’s for the Wheatstone and Gorgon facilities.”

Unions now plan to provide a seven-day notice to Chevron before resuming strikes.

“Notice of further protected industrial action will be filed on Monday,” the Offshore Alliance said in a social media post on Friday.

LNG Prime contacted Chevron for a comment on the matter.

“Chevron Australia has consistently and meaningfully engaged in an effort to finalize enterprise agreements for employees at our Gorgon and Wheatstone gas facilities with market competitive remuneration and conditions,” a Chevron spokesperson said.

“We have accepted the recommendation of the Fair Work Commission, which proposed terms to resolve outstanding claims that would form part of the proposed agreements, and we continue to work with all parties to finalize the drafting process based on the recommendation,” the spokesperson said.

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