CASE STUDIES / CHARTERING · OCT 2024
November pays the third vessel +$4.1M.
Six US Gulf cargoes, two ships, and a broker offering a third at the Spark 30 rate. Whether to take it comes down entirely to the monthly JKM-TTF spread.
+$4.1M
WHAT THE THIRD VESSEL EARNS IN NOVEMBER 2024
Six cargoes, two ships, one offer.
01 · THE QUESTION
The base book loads six Q4 cargoes at Sabine Pass for spot delivery to Gate or Futtsu on two 174K vessels. The question: does a TC-in third vessel at $64,000 a day capture the Europe-Asia spread?
THE BASE BOOK
- 6 Q4 cargoes at Sabine Pass, 115% HH + $3.5 tolling
- Spot demand: Gate at 100% TTF, Futtsu at 100% JKM
- Two 174K vessels, forward curves HH, TTF and JKM
THE OFFER
- A broker offers a third 174K vessel, TC-in
- At the Spark 30 rate: $64,000 per day
- The optimiser stays free to leave it unused
The optimiser only takes it when it pays.
02 · THE ANSWER
In October the spread is too thin, so the vessel stays idle and P&L equals the base case. November and December fund it comfortably.
EXACT ENGINE RESULTS: BASE $130,560,786 · NOVEMBER $134,696,454 · DECEMBER $133,229,865 · OCTOBER EQUALS THE BASE CASE
The spread that decides it.
03 · THE DRIVER
A ship taken in one month discharges into the next, so the spread at discharge decides: it is thinnest in November and widens through December and January, which is when the extra ship pays.
FORWARDS OCT 24 TO JAN 25 · TTF 12.90 / 12.65 / 12.80 / 12.90 · JKM 14.05 / 13.20 / 13.85 / 14.15 $/MMBTU
04 · THE VERDICT
In October the third ship adds nothing and costs nothing:
in November and December, the spread pays for it.
Chartering is optionality priced against the whole book. The optimiser leaves the vessel idle when the discharge-month spread is thin and takes it when the extra shipping length monetises the Europe-Asia arbitrage.
The cargo mix flips to Futtsu.
05 · THE FLOWS
With the third ship in play, the book swings from a Europe-weighted split to an Asia-weighted one, monetising the spread the extra shipping length creates.
Base and October: 4 Gate, 2 Futtsu
Two vessels favour the shorter European run; the TC offer stays idle and costs nothing.
November: 1 Gate, 5 Futtsu
The third ship provides the shipping length to chase the December spread east, +$4.1M.
December: 2 Gate, 4 Futtsu
Still Asia-weighted into the January spread, +$2.7M over the base.
Straight from the engine.
06 · ENGINE OUTPUT
The base run as the engine reports it, and the forward curves the decision hangs on.
What the third vessel buys, and when.
07 · TAKEAWAYS
The option costs nothing when it is out of the money
In October the optimiser leaves the TC idle and P&L equals the base case exactly.
November pays +$4.1M, December +$2.7M
The extra shipping length flips the cargo mix to Futtsu and monetises the discharge-month spread.
It is a spread trade, not a freight trade
Whether $64,000 a day pays depends entirely on the JKM-TTF spread at discharge, so the answer changes month by month.
Modelled with X-LNG.
08 · THE TOOL
Your world goes in
Contracts, vessels, charter rates, prices, spot assumptions and constraints. The full book, not a slice.
One optimal plan comes out
Feasible, P&L-maximising and constraint-compliant, re-solved for every scenario in minutes.
Every number checks out
Each result can be recalculated by hand. Transparency your risk committee can audit.
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