Betting Big LNG Rates Will Rise

Gas is big and growing, as rates for LNG hauling tanker rise for a third year, fueled in part by demand from Japan. According to a Bloomberg report, rising Japanese demand means that Golar LNG Ltd., which operates nine LNG tankers and is controlled by John Fredriksen, will report a threefold gain in 2012 net income, according to the mean of 11 analyst estimates in a Bloomberg survey. Golar is reactivating four-decade-old mothballed ships after rates doubled in 2011 and are forecast by analysts to advance another 58 percent in 2012.

Traders redirected 13 ships to Asia from Europe or the U.S. in the past month, data compiled by Bloomberg show. LNG from Nigeria, the largest exporter in the Atlantic, sold for 93 percent more in Japan than in the U.K. in January, up from 40 percent 11 months ago, according to New York-based Poten & Partners.

Shipments to Japan, the biggest LNG buyer, are growing to a record after March’s earthquake and tsunami shuttered about 90 percent of the nation’s nuclear power. 

LNG tanker rates rose to $97,630 a day last year from $43,663 in 2010, according to Fearnley LNG, a unit of Norway’s second-largest shipbroker. Daily spots will average $147,000 in 2012, the median of six analyst estimates compiled by Bloomberg shows. 

Fredriksen, a long-time global polarizing figure in shipping circles, is betting big the rally will continue, as recently Golar announced plans to spend $400m on two new LNG carriers.