LNG SHIPPING ECONOMICS AND FREIGHT CALCULATIONS

Course Introduction

Understanding the economics of LNG shipping is critical for optimizing costs, ensuring energy security, and making informed decisions in today’s volatile market. With LNG accounting for an increasingly significant share of global energy supply, the ability to assess shipping cost structures and freight calculations has become a vital skill across various operational and strategic roles.

Seattle International Institute presents this specialized course to provide participants with hands-on skills in LNG shipping cost modelling, freight rate optimization, and strategic chartering decisions. Participants will explore the technical, economic, and contractual dimensions of LNG shipping, using real-world scenarios and practical exercises to apply the concepts directly.

Course Objectives

• Understand the structure and role of the LNG shipping segment within the LNG value chain
• Analyze key elements of freight cost including capital recovery, fuel consumption, chartering, and operational variables
• Gain practical skills in developing freight cost models using Excel
• Evaluate economic impacts of different shipping technologies and fleet configurations
• Explore real-life case studies to apply freight optimization strategies and develop integrated shipping plans

Target Audience

This course is ideal for a wide range of professionals working across LNG and maritime operations, including:

• Technical and shipping professionals involved in LNG transportation
• Commercial and chartering officers
• Project managers in LNG supply and logistics
• Energy market analysts and operations planners
• Contract management and governance staff
• Anyone seeking to deepen their understanding of LNG shipping cost dynamics

Course Topics

Day 1 – LNG Shipping Fundamentals

• Introduction to the LNG business and value chain
• LNG ship types, technologies, and market trends
• Overview of shipping routes and voyage planning
• Factors influencing shipping costs
• Case analysis: Recent shifts in global LNG trade patterns

Day 2 – Freight Cost Elements & Modelling

• Capital cost recovery and DCF methods
• Fixed and variable operating cost structures
• Bunker fuel consumption and propulsion efficiency
• Chartering structures and freight rate formation
• Excel-based exercise: Building a base freight cost model

Day 3 – Freight Optimization & Commercial Strategies

• Evaluating charter types and pricing mechanisms
• Freight optimization across routes and ship types
• Spot vs term charter strategies
• Modelling profitability under changing market conditions
• Interactive case: Optimizing shipping for a multi-contract portfolio

Day 4 – Contracts, Management Systems & Special Operations

• LNG charter party agreements and risk-sharing structures
• Contract clauses affecting freight exposure
• Special voyage considerations and cost implications
• Performance management systems and benchmarking
• Workshop: Contract evaluation and operational risk scenario

Day 5 – Strategic Planning & Outlook

• Integrated shipping and delivery plan development
• Aligning storage and shipping capacities
• Evaluating fleet performance and strategic KPIs
• LNG freight outlook and global trade trends
• Final project: Presenting a full shipping and cost plan