Himalaya Shipping now has a live fleet of three vessels, following the delivery of another dual-fuel newcastlemax slightly ahead of schedule.
But the vessel — named Mount Etna — is not expected to run on LNG bunkers immediately, even though the alternative fuel is growing ever more viable as fuel price spreads narrow.
The Mount Etna will commence a minimum 24-month charter that has been fixed at an index-linked rate in the region of 140% to 142% over the Baltic Capesize Index.
Based on Thursday’s index, this means the Etna is earning roughly $22,076 per day currently, plus a share of profits generated from the vessel’s scrubber or running on LNG.
The time-charter includes rights to convert contract to fixed-rate employment.
TradeWinds understands the charterer of the Mount Etna is Koch Logistics.
Koch is also a major shareholder in 2020 Bulkers, of which Herman Billung is chief executive and which was also founded and backed by Tor Olav Troim. Six of 2020 Bulkers’ 10 newcastlemaxes are on charter to Koch.
It will be the charterer who decides whether the ship will run on LNG fuel, which looks unlikely at this moment even though fuel-price spreads between conventional fuel oil and LNG are narrowing.
“I don’t see it as an imminent fuel source,” Himalaya chief executive Billung told TradeWinds on Thursday.
“The spread is much narrower than it used to be. It’s a little bit complicated because it depends where you source it from — the LNG — and also, when you do the maths, the calorific value of LNG is is much higher than regular fuel.”
All this being said, Billung said Himalaya’s charterers are beginning to ask more and more questions about LNG fuel, so the situation could change in the future if spreads narrow further.
“I know that one of our charterers, who have a VLCC with dual fuel, on that particular vessel they used LNG, but again it has all to do with the price of the bunkers really,” he said.
Himalaya took delivery of the 210,000-dwt vessels Mount Norefjell and Mount Ita in March, which have started long-term charters with unnamed customers.
Himalaya completed its initial public offering on the New York Stock Exchange on 31 March and has a dual listing in Oslo.
The stock floated in New York at a price of $5.80 in the IPO and the share price has remained relatively flat since then. Shares were trading at $5.77 as of 10am in New York on Thursday.
