Three new charters and developments in Brazil have KNOT Offshore confident about the coming months.
The NYK-Knutsen shuttle tanker joint venutre said in its third quarter earnings release that the 162,300-dwt Windsor Knutsen (built 2007) was extended until October 2020 by Shell, the 157,600-dwt Bodil Knutsen (built 2011) until May 2021 by Equinor and the 123,000-dwt Torill Knutsen (built 2013) by Eni Trading and Shipping until November 2020.
Further, the company cited data from Rystad Energy showing oil production in Brazil reaching 4 million barrels per day by 2025.
"We believe that the shuttle tanker [market] has a solid growth outlook," said chief executive Gary Chapman on the company's earnings call.
"Once oilfields are producing, shuttle tankers are needed and in some cases, only certain vessels can service certain fields."
He added KNOT's fleet had an average age around 6 years old and that newer tonnage would be needed not only to service Brazilian projects, but projects in the North and Barents seas as well.
The Brazilian projects in particular, though, will likely need KNOT-owned ships and the companies behind the projects will want to control their own shuttle tankers, making long-term contracts probable.
For the third quarter, KNOT posted a profit of $14.1m, down from the $20.9m in the same period last year.
Revenues declined slightly year-over-year from $71m to $70.7m, while vessel operating expenses grew slightly, from $14.9m to $15.2m.
KNOT reported 99.7% utilization for the quarter, its average since its initial public offering in 2013.
