The overnight running aground of an ultra large container ship that has blocked maritime traffic on both sides of the Suez Canal is unlikely to have a major impact on the LNG spot shipping market unless it is prolonged.
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"Not really," answered a shipbroker when asked whether the grounding of the Ever Given, a 200,000 tonne ship operated by Evergreen, would affect the LNG spot shipping market. "It might take 2 to 4 days to move the ship out of the way, some people even say it might even be done today," continued the shipbroker.
A charterer said it seemed to be rather calm.
A separate chartering source said, "It seems that it might be resolved soon. I saw some photos that it's now at the side of the channel, but there are no verifications."
A third charterer said QG (Qatargas) may get impacted depending on how long it takes to get resolved, because going into the Mediterrenian or Europe via the Suez Canal can save quite some time.
"Deliveries from Ras Laffan to Europe may have to go around the Cape instead of via the Suez, if this gets prolonged," explained the charterer.
A spot voyage from Qatar into Northwest Europe takes around 16 days via the Suez, while going around the Cape of Good Hope would take around 27 days.
The LNG tanker Woodside Charles Allen, which loaded at Cheniere Energy's Sabine Pass export terminal in Louisiana and shipped on March 8, was in the Mediterranean Sea near the entrance to the Suez Canal on March 24, according to cFlow, S&P Global Platts trade flow software. Its captain's destination was listed as awaiting orders.
LNG tankers heading from the US Gulf Coast to Asia generally pass through the Panama Canal, as it is the shortest route. Sometimes they opt to sail eastward, to avoid congestion and transit fees at the Panama Canal.
The Cape of Good Hope and Suez will generally see increased activity in shoulder periods as LNG charterers take advantage of the contango in the curve. While the Suez route is faster than rounding the Cape, the Suez has the advantage of greater optionality as it passes over 80% of the world's LNG demand on the way to the Japan-South Korea region.
One LNG tanker that loaded at Sabine Pass was near the entrance to the Panama Canal on March 24, while another LNG tanker that loaded at Sabine Pass was passing through the Canal on March 24, cFlow shows. Two more LNG tankers that loaded at Freeport LNG in Texas were in the Pacific Ocean on March 24 after recently passing through the Panama Canal.
Platts Analytics expects full dispatch economics out of the US to continue in the months ahead, due to strong LNG market factors such as supportive prices and low shipping costs.