Belgium gas shipowner and infrastructure provider Exmar is winding down operations on its midsize floating LNG production unit Tango FLNG in Argentina and looking for new employment on the floater.
In its third-quarter results, Exmar's 500,000-tonne-per-annum-capacity Tango FLNG is being “prepared for demobilisation”.
“Commercial leads for new employment are actively pursued,” the company said.
In October, Exmar reached a $150m settlement with the LNG floater’s charterer — YPF —over the early termination of the charter on the unit.
The company said it has received a first payment of $22m, with the $128m balance to be paid in 18 monthly instalments backed by a financial security issued by an investment grade counterparty.
Exmar has already paid $22m on a planned $40m on a debt services account for the unit and is in discussions on how to pay the balance.
The company said arbitration is continuing with trader Gunvor over the charter on its barge-based floating storage and regasification unit (FSRU) S188 (built 2018).
Exmar reported an operating result of $4.1m in the third quarter for its infrastructure business unit, up from $700,000 a year ago.
But the company said this result was negatively affected by the provision of $16.4m on uncollected revenues from YPF on Tango FLNG.
Exmar slashed its third-quarter losses to $1.9m, down from a loss of $7.4m in the same period last year.
Turnover climbed to $143.4m from $95.7m in the comparable quarter of 2019.
The company said its operating profit for its shipping business unit slipped to $3.6m, against $5.4m.
Exmar said charter rates for the VLGC and midsize gas carriers have “nearly completely recovered” after the earlier impacts this year from the Covid-19 pandemic in the first half and a summer lull.
Third-quarter time-chartered equivalents average $1.2m per month, with spot rates topping $1.5m per month at the end of the period, the company said.
Exmar’s VLGC coverage for 2021 stands at 88%.
Rates for midsize vessels have improved up to low $700,000 per month on a modern 38,000 cbm for a one-year time charter, the company said.
The pressurised gas carrier sector was less positive. Freight levels were "well below operating expenses" for vessels trading west of Suez, Exmar said. Current charter coverage for next year in this sector stands at about 35%.
“Although the pandemic is a new factor to be taken into account, there is reason to be confident about the gas shipping markets with a mounting focus on sustainability and new transport fuel solutions,” Exmar said.
The company detailed that the construction of its first LPG-fuelled, 88,000-cbm VLGCs against time charters with Equinor and on schedule for delivery in the second and third quarters of 2021.
Exmar operates a single steam-turbine LNG carrier, the 138,000-cbm Excalibur (built 2002), which is fixed on charter to Excelerate Energy until the end of 2021 or early in 2022.
