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(Bloomberg) — Liquefied natural gas vessel rates hit a record high, with Europe’s dash to lock-in winter energy supplies sparking a scramble for ships and raising fears some buyers may find themselves without means to transport the fuel.

The cost to charter an LNG ship in the Atlantic jumped to $397,500 per day on Tuesday, surpassing an all-time high set in the Pacific last year, according to Spark Commodities, which assesses prices from shipbrokers.

Those rates are poised to keep ballooning as traders and utilities move to hoard more gas. This presents a new risk to buyers this winter: those without ships will have to pay sky-high rates to ferry additional fuel, or worse, find they can’t book any ship at all.

There are few vessels available through the rest of the year, and free ones are being offered at astronomical rates, according to LNG traders. Energy majors, which typically lease their vessels to other buyers, are refusing to do so out of fear they could be caught without a ship as winter approaches, the traders said.

Europe’s gas storage sites are quickly filling up in preparation for a winter without Russian fuel. With inventories nearing max capacity, utilities and traders are increasingly storing LNG in vessels at sea, further tying up ships that would normally ferry the fuel between ports.

Ships are in such short supply that LNG exporters in Asia are selling gas directly from loading ports rather than offering to ship the fuel. Those that don’t have vessels are being forced to find buyers that have a way to transport the cargo, traders said.

Author: Stephen Stapczynski, Bloomberg News
Source:Europe Rushing to Secure Gas Sparks Record High LNG Ship Rates

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