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Bloomberg
Some liquefied natural gas (LNG) sellers aren’t in a rush to deliver their multimillion-dollar cargoes. With uncertain demand and no signs yet of bitter cold, some traders are preferring to keep their fuel inside vessels in the hope prices will rise. While the sight of stationary cargoes might not be unusual in the more-established oil market, technology has only recently made it feasible to keep LNG at minus 162 degrees Celsius (minus 260 degrees Fahrenheit) for longer periods.
There are about 30 vessels currently flagged as floating storage globally, two-thirds of which are in Asia, the biggest LNG consuming region, according to cargo-tracking company Kpler SAS. That’s still a fraction of a global fleet of more than 500 vessels.
The practice of using tankers as floating storage is common in the more developed oil market. It happens during periods of contango — when storage on land is used up, immediate demand is weak and the cost for later delivery is high enough to cover the expense of storing crude on a tanker.