Closed ATM View - ACCC 2022-01
Market advice and estimates of future LNG freight rates
Canberra, Sydney, Melbourne, Adelaide, Perth, Brisbane, Darwin, Hobart
The ACCC seeks estimates of future LNG freight rates, expressed as an annual average, over a 5 year forward period. These estimates will be provided to the ACCC every 6 months and must be expressed as a price (USD) per MMBtu. These forward LNG freight rate estimates will be used to calculate LNG netback prices (by deducting these estimates, and other costs, from estimates of future LNG prices).
In estimating future LNG freight rates, the supplier will consider and account for all relevant factors, including:
- new build vessel costs;
- payback periods;
- future LNG demand and supply dynamics; and
- contemporary LNG freight charter rates for 5 years (or relevant charter terms.
The supplier will be required to provide information on how it has estimated LNG freight rates, and on any market development that provide context or underpin estimates of LNG freight rates.
In particular, the supplier will be required to provide information on:
- relevant LNG charter contracts, or parameters in relevant LNG charter contracts, that have informed estimates of LNG freight rates;
- key assumptions that have been made to estimate LNG freight rates, including payback periods;
- market developments that provide necessary context to the LNG freight rate estimates provided by the supplier (including developments that explain changes in freight rate estimates) such as changes in demand and supply in LNG freight markets; and
- any other relevant market developments.
The supplier will be required to provide:
- reports that set out the proposed approach to estimating future LNG freight rates;
- estimates of future LNG freight rates, delivered every 6 months; and
- written reports that set out relevant market developments to provide context for estimates of future LNG freight rates, delivered every 6 months.
The supplier will be required to meet with ACCC staff as required over the life of the contract.
No Mandatory Conditions for Participation are specified.
The supplier will deliver two written reports outlining the proposed and agreed methodology for estimating future LNG freight rates to the ACCC in April and May 2022.
Estimates of future LNG freight rates, and corresponding written reports, will be delivered in June and December each year from June 2022 to June 2025.