Americas News
Shale Gas Boosts LPG Shipping Rates
Rates for liquefied petroleum gas (LPG) shipping rose 42 percent this month to $68.38 per metric tonne (pmt) as U.S. shale drilling produces more of the fuel for export, Bloomberg reports.
Miguel De Potter, chief financial officer of Exmar NV, predicted that, by the end of the year, the price for LPG shipping will rise higher than the record high of $81.64 pmt set in 2008.
Athens-based StealthGas Inc. said in March that it was sending ships to the Americas to meet demand there.
The rising rates for LPG shipping contrasts with the situation for most of the merchant fleet, which in many cases has faced losses because of low shipping rates in recent months.
Trade group INTERTANKO said earlier this spring that the oil tanker industry is in "really dire straits."
Daily earnings for very large gas carriers (VLGCs), which need to hit about $24,000 to break even, will average $28,000 this year, up 7.7 percent from 2012, according to RS Platou Markets AS.
"This is a new trade that's evolved," said Knut Stangebye Olsen, an analyst at Lorentzen & Stemoco AS.
"There's a lot of shale production in the U.S., and they're building pipelines, they're building new terminals, so there are a lot of volumes."
Gains in LPG shipping rates may be hindered by delays in building new terminals and accelerating fleet growth, however, with capacity expected to expand by 5.6 percent this year and 4.7 percent in 2014.
