Drewry: LNG Short-Term Freight Index Remains Unchanged
Drewry Maritime Research’s latest LNG Shipping Insight report saw the LNG Short-Term Freight Index remain unchanged at January’s level.
This was largely because increased heating demand across the Northern Hemisphere, particularly in Asia, was balanced by an adequate supply of tonnage. This supply looks set to continue to increase. Gas discoveries in and around Africa indicate that the continent could emerge as the fourth major supply base for LNG, after the Middle East, Australia and the US, according to Drewry Maritime Research.
If all the projects that are currently being pursued come on stream on schedule, Africa could leave Qatar behind in terms of nameplate capacity and LNG production by the end of the decade.
Front-End Engineering & Design (FEED) for the first LNG terminal in Mozambique was awarded to a joint venture between Fluor Corporation and JGC Corporation by Anadarko Moçambique in January 2013. Initially, the FEED will deliver 20 million tonnes per annum of LNG, with the potential to expand its capacity to 50 mtpa of LNG in the future.
Asian markets are aggressively pursuing long-term LNG contracts. Firms from Japan, South Korea, India and Thailand hold the majority stakes in the feed gas licences in Mozambique and are likely buy most of the cargoes.
However almost all the existing and emerging suppliers in Africa have faced problems. Commissioning of Angola LNG is now delayed by more than a year; Egypt has been facing FEED-gas supply problems, Olokola LNG hasn’t moved in a while and Nigeria LNG declared force majeure on spot cargoes recently (though it has resumed operations). Algerian plans to attract investments in the energy sector were also jolted by the terrorist attacks on the ln Amenas gas facility.
Hopes for the much-needed supply boost rest on Mozambique. If everything falls into place for Mozambique, it could become the most sought-after source for LNG buyers around the world.
The Drewry LNG Freight Index is freight rate assessments based on actual deals and market reports for a conventional LNG carrier of 160,000-173,000 cbm and less than five years of age. Hire period for long-term freight rate assessments are for charter durations of 15 years or more, while short-term freight rate assessments are based on charter duration of one to three years. Base year for the Index is January 2005.
LNG World News Staff, March 5, 2013; Image: RasGas