Time Charter Equivalent

Exports of liquefied petroleum gases (LPGs – propane and butane) from the U.S. to international markets - are expected to nearly double from 460 Mb/d in 2014 to 915 Mb/d in 2019 as production from gas plant processing exceeds domestic demand. Available Very Large Gas Carrier (VLGC) vessels to carry these increased overseas volumes are limited. As a result spot freight rates have reached record levels recently. In today’s blog “Stayin’ Afloat With the LPGees – Part 4 Freight Voyage Calculation Model” Sandy Fielden walks through a voyage cost calculation. Today we walk through a voyage cost calculation.

At our School of Energy International LPG session earlier this month, Kelly Van Hull presented RBN’s outlook for global liquified petroleum gases (LPG)  production – showing the US poised to become the world’s top exporter of LPGs within the next year or two - displacing Qatar. While most U.S. LPG exports go to Latin America today, a growing portion will move to Europe and Asia in the future. The limited fleet of very large gas carriers (VLGCs) used to ship LPG is growing rapidly with a record new build order book of 72 ships – 45 percent of today’s fleet of 161 vessels. Spot freight rates assessed daily by London’s Baltic Exchange are also at record levels of $82/MT this week. Today we take a closer look at international LPG ship chartering.