Awilco LNG is preparing to fix out one of its two vessels on redelivery from its time charter in the third quarter.
The Norwegian shipowner’s 156,000-cbm WilForce (built 2013) is due to redeliver from its existing charter with Osaka Gas, and Awilco said it is “actively exploring possibilities for next employment”.
The firm charter period on Awilco’s second LNG carrier, sister ship WilPride (built 2013), runs until late 2025 with an option to extend the hire by two years.
Chief executive Jon Skule Storheill said: “With WilForce coming open this summer, we are pleased to see activity picking up after the shoulder season, although rates have yet to improve significantly.”
The company said it has lately seen charterers starting to position for next winter and take advantage of the weak sentiment.
“The short-term market has somewhat improved from the recent lows, although the large orderbook and limited new production capacity in 2024 does give some concern short-term,” it added.
In May, Awilco LNG said it signed documentation for the refinancing of both its vessels and exercised the purchase option under the existing financing.
China Development Bank Financial Leasing is buying the two ships, with Awilco LNG taking them back on lease for a total of 12 years, for total lease payments of $117.8m.
The shipowner has the option to buy the vessels back when the lease period expires, for a price not exceeding $44m.
Storheill said: “Progress has been made on the refinancing and we aim to close this transaction within the second quarter as it will significantly reduce our costs and cash breakeven level.”
The company said that as a result of an annual reassessment at the end of 2023, the normal useful life of its vessels has, from 1 January 2024, been revised from an estimation of 40 years to 35 years from delivery.
First-quarter net profit shrank to $7.2m from $9.1m in the same three months of 2023.
Net freight income inched higher to $21.9m from $20.5m a year earlier.
The company said both its vessels traded on their fixed-rate contracts without offhire through the first quarter with time charter equivalent earnings unchanged from the previous three months at $120,600 per day.
