Company: DLNG
Filing Date: 2025-04-10
Form Type: 20-F
Source: 0001104659-25-033744
Chunk: 108

Company: Dynagas LNG Partners LP
Filing Date: 2025-04-10
Form: 20-F
Item: Item 3
Chunk 108
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, relatively mild winter and rising nuclear and renewable power in Asia, which limited LNG demand. In 2024, LNG shipping rates continued to decline as higher fleet growth due to increased vessel deliveries and fewer demolitions, outpaced trade growth. Average LNG shipping spot rates reached a five- year (2020-2024) low in 2024.

Table of Contents

Spot rate for LNG ships January 2012 - February 2025

(U. S. $ per day)

Source: Baltic exchange, Drewry

Russia-Ukraine war and impact on LNG shipping

The ongoing Russia-Ukraine war has led to a change in the LNG shipping trade pattern with Europe substituting Russian natural gas imports with LNG imports. The changing trade patterns have impacted LNG shipping with uncertainty over Russian gas supply to Europe, compelling the latter to increase its imports and upping the use of other alternatives - coal and nuclear- along with energy conservation measures. Europe accelerated FSRU-based LNG import projects to increase imports. The continent introduced about 10 import terminals (aggregating 41 mtpa), including eight FSRUs since the war. The rush to build import terminals in Europe eased considerably in 2023. Some projects were delayed or cancelled as the continent’s position got better compared to 2022. Europe’s shift to Russian gas seems unlikely in the event of a ceasefire in the Russia-Ukraine war, as the continent has spent billions of dollars to develop a resilient LNG infrastructure, in order to reduce its reliance on Russian gas. Furthermore, European players have signed several sale and purchase agreements to diversify their sources.

Israel-Hamas war and the Houthi crisis in the Red Sea impact on LNG shipping

US, Qatari and even Russian LNG vessels are transiting vis the Cape of Good Hope (COGH) due to the heightened Houthi attacks in the Red Sea, which adds premium insurance, increasing costs. The higher frequency of LNG vessels via COGH and reduced transits via the Suez and Panama canals could cause volatility in LNG shipping rates during the seasonal high demand. Transits via the COGH result in longer deployment of LNGCs, generating vessel demand and adding tonne miles. However, the high deliveries in 2023 and 2024 have countered the possible gains that the sector could reap due to the ongoing disruptions at the two major canals.

Newbuilding Prices

Similar to other types of vessels, newbuilding prices for LNG carriers rose steeply in the late 1980s and early 1990