The cost of shipping liquified methane gas (also known as LNG) to Europe hit $450,000 per day last week with ships waiting as long as four days just to unload at Western European ports, the Wall Street Journal reports. Brokers say daily cargo prices — which are already as much as fifteen times higher than they were a year ago — could more than double again to $1 million per day as winter approaches. Though physical infrastructure constraints are an issue for deliveries, about half of the existing 650-boat-strong global methane shipping fleet is being used as floating storage.
Capital Product Partners CEO Jerry Kalogiratos told the Walls Street Journal, “Certain gas traders are keeping the cargoes because there is no fixed price on them. If gas prices go up, the delivered LNG can be worth millions more and can end up with a different customer that will pay the higher price.”
The exorbitant costs of shipping liquified methane gas, and paying such high daily costs just waiting to unload, illustrate how greatly European demand has distorted the global market in the wake of Russia’s war in Ukraine. Efforts to export as much U.S. methane gas to Europe as possible have driven up American methane gas prices and will increase home heating costs for those burning methane gas by 28% over last winter. High prices have also shut out Pakistan from being able to afford gas altogether, causing blackouts in nations responsible for a negligible amount of historic climate pollution but facing the worst impacts of climate change. (Wall Street Journal $)