Oslo-listed Avance Gas has added another year of variable revenue in a VLGC charter extension.
The John Fredriksen company said the 83,000-cbm Chinook (built 2015) had been fixed on a floating rate to an unnamed energy major until July.
Now the vessel will stay on with the charterer for another 12 months, aligning with the drydocking window for the ship expected to be in the middle of 2025.
The company has previously said the ship could be retrofitted to run on LPG at that point.
In February, Avance Gas stretched another VLGC charter by a year.
The 91,000-dwt Avance Polaris (built 2022) had been on a two-year variable deal with an energy major named by brokers as France’s TotalEnergies.
The extension will take the Avance Polaris up to February 2025.
The Baltic Exchange assessed VLGC rates from the Middle East to Asia at $57,400 per day, up 16% in a day.
Clarksons Securities said there had been a significant price-spread expansion between Asia and the West.
LPG shipments to Asia reached a record 7.5m tonnes in April, due to strong Chinese demand and the opening of new propane dehydrogenation plants in late March.
In the US, propane inventories remained high at 58.3m barrels.
Rates could climb further
Forward freight agreement market quotes rose 10% last week, although third-quarter contracts suggest a slight slowdown in earnings towards $50,000 per day, the investment bank said.
“The Panama Canal is expected to further normalise capacity in the coming months, which could have a negative impact on the VLGC segment,” its analysts said.
Fearnley Securities also noted a “big uptick” in freight rates as the arbitrage widens, potentially supporting further gains.
Earnings from Houston to Japan were up 7% at $65,000 per day.
Analyst Fredrik Dybwad believes rates could theoretically move up to between $75,000 and $80,000 per day.
