John Fredriksen’s Flex LNG believes massive arbitrage profit on gas cargoes lifted in the US will eventually feed through into higher LNG carrier spot rates.

The Oslo-listed shipowner’s chief executive, Oystein Kalleklev, said in a presentation on Thursday that elevated LNG commodity prices are expected to be in place until the middle of 2022, going by the forward curve.

He added that Henry Hub gas loaded in the US Gulf is worth $20m per cargo and can be sold with a profit of $92m in Europe and $108m in Asia.

Kalleklev called these “unprecedented” numbers.

“We do think it will trickle down into freight eventually,” he added.

The calculations were based on a Henry Hub price of $5 per mmbtu, with a price of $28 in Europe and $32 in Asia.

The CEO said there is a tolling price of $2 per mmbtu to pick up the cargo in the US Gulf, plus a $1 cost to ship.

But he added that it was still happy days for cargo owners: “You are still making a killing.”

Fearnley Securities quoted the rate for a one-year time charter for a tri-fuel diesel propulsion (TFDE) LNG carrier at $93,000 per day.

Cleaves Securities assessed ME-GI vessels at $73,000 for spot trips, which represented a 4% gain on the prior week. The investment bank also said TFDE vessels added 5% to reach $57,000 per day and steam turbine LNG ships put on 13% at $38,000 per day compared to the prior week.

Positive outlook

According to Clarkson Research, the spot shipping market outlook remains positive as the peak winter demand season approaches, with firm global gas demand showing no sign of easing and inventories still low.

Clarksons Platou Securities said one-year and multi-month rates remain at historically firm levels and at a significant premium to spot rates.

Demand for term charters has been firm in recent months as charterers attempted to secure cover for the winter, the investment bank said.

Looking ahead to next year, LNG carrier market fundamentals appear positive, Clarksons Platou believes.

“Global LNG tonne-mile trade is projected to grow by 5.7%, driven once again by US export and Chinese import growth, against a backdrop of fleet capacity growth of 5.1%,” the company said.

Platts assessed the Asian LNG price at $32 per mmbtu on 28 September, the highest number since January and February this year.

Flex LNG said its 13 advanced LNG carriers will be able to take advantage of projected market growth of between 3% and 4% per year over the next two decades.

And a large share of the global fleet will face commercial difficulties due to efficiency rules, the company added.

Kalleklev said the market’s strong short- and long-term outlook, coupled with a substantial backlog, will enable the shipping company to pay attractive dividends.