QatarEnergy Offers 10 LNG Tankers For Lease As Production Halt Sends LNG Shipping Rates To Multi-Year Highs

QatarEnergy has offered 10 liquefied natural gas (LNG) carriers for lease after halting production at its 77-million-tonnes-per-year LNG facility, according to industry sources.

The production halt has reduced vessel availability and increased competition for LNG cargoes between the Atlantic and Pacific regions, putting pressure on global gas supply chains.

QatarEnergy has also declared force majeure on LNG shipments, meaning some deliveries may not happen as scheduled due to factors beyond the company’s control.

According to the Financial Times, Qatar’s Energy Minister Saad Al-Kaabi said it could take weeks or even months for LNG deliveries to return to normal, even if the conflict ends soon.

The halt at the 77-million-tonnes-per-year facility has disrupted one of the world’s largest LNG export flows. Qatar is currently the second-largest LNG exporter globally, supplying key markets in Europe and Asia.

Industry sources said 10 LNG carriers have been made available for lease, with most vessels offered for prompt charter and some expected to become available from mid-March.

The fleet includes at least three Q-Flex LNG tankers, each with a capacity of around 210,000 cubic metres. These vessels can carry up to 50% more LNG than conventional LNG carriers and are commonly used by Qatargas for long-distance exports to Europe and Asia. The remaining vessels are dual-fuel, two-stroke LNG carriers with a capacity of around 174,000 cubic metres.

Q-Flex vessels are among the largest LNG carriers in operation and are designed to transport large volumes of gas on long international routes.

According to Spark Commodities, Atlantic LNG freight rates rose by $221,500 per day week-on-week to $264,250 per day, the highest level since December 2022. Pacific rates also increased to $219,250 per day.

The production halt has increased competition for LNG cargoes between Atlantic suppliers and Pacific buyers, especially in Europe and Asia, which depend heavily on LNG imports.

Higher shipping rates could increase the delivered cost of LNG, which may affect energy prices and supply security in major importing regions.

Reference: Reuters