Avenir LNG looks increasingly likely to charter out the first of its small-scale newbuildings, the chief executive of one of its major shareholders has confirmed.
The Oslo over the counter listed company has four 7,500-cbm ships and two 20,000-cbm vessels on order and an 80% share in an import terminal being built in Sardinia.
While Avenir is styling itself as a supplier of LNG and not a shipowner, the first of the newbuildings will arrive before its own infrastructure is completed.
“We are considering doing a time charter of the first ship,” said Niels Stolt-Nielsen, chief executive of one of the company’s three core backers explained.
“We are very fortunate with the timing of the first ship as there is big interest.
“We will look at maybe a three-year time charter for the first ship at very, very healthy levels.”
He said the later newbuildings would supply the Sardinia terminal and customer base being built up in the region.
TradeWinds first reported last month the first Avenir newbuilding could be chartered out with commercial director Mats Fagerberg revealing the company was "evaluating different options" for the vessel.
Avenir launched last year with $110m generated from equity in kind and cash, with Stolt, Golar LPG and Hoegh LNG.
“A further $72m via a private placement is expected to complete the extra funding for the initial asset portfolio, with the remaining capex to be financed by debt,” Stolt-Nielsen said.
Stolt-Nielsen Gas, the division which owns the Avenir shares, was loss-making in the second quarter with red ink of $1.4m attributed to development expenses.
Overall Stolt booked a profit of $3.6m in the quarter, below the $11m consensus forecast in the market.
Stolt-Nielsen said Stolt Tankers continued to focus on new COA contracts in which the customer would take on the higher fuel costs of IMO 2020, which would add over $100m to the company's fuel bill.
“As we have said many times before the industry is close to bankrupt,” Stolt-Nielsen said.
“Everybody is losing money and for Stolt Nielsen to take on the additional cost of $130m – you can’t do it.
“If you can’t pass it on you should not take the business.”
