Norwegian shipowner Awilco LNG has fixed one of its two-ship LNG carrier fleet on an 18-month time-charter contract.
The company said it had chartered its 156,000-cbm tri-fuel diesel-electric WilForce (built 2013) to “a major utility” without naming the party involved.
LNG industry sources named Japan’s Osaka Gas Co as the vessel’s charterer.
Awilco said the contract is estimated to contribute an Ebitda of about $73m over the charter period, indicating a rate of around $150,000 per day on the vessel.
The company said the deal will be in direct continuation of WilForce's current charter.
In August, TradeWinds reported that WilForce had been fixed to energy major BP for six months at a rate close to $110,000 per day.
Awilco chief executive Jon Skule Storheill said: “With this contract, we have been able to take advantage of the strong market and have now covered all trading days in 2023 and approximately 80% of 2024 at an average rate of approximately $120,000 per day.
“This ensures high cash generation and profitability for the next two years, also considering both vessels are scheduled for special survey, and dry docking [in the] second half [of] 2023,” Storheill said.
Awilco’s other vessel — the sistership WilPride — is due to start a three-year charter with a European importer in December.
This deal includes an option to extend the hire by two additional years.
Awilco said the fixed-rate contracts on its two vessels will increase its cash flow generation.
The company said its board of directors has approved a revised dividend policy and will distribute “a substantial part of annual free cash flow” on a quarterly basis, subject to “required working capital and a robust cash buffer”.
An initial payment is expected to be made in the first quarter of 2023 when both vessels have started their contracts.
News of Awilco's latest contract comes as spot charter rates for LNG carriers tumble in the face of full storage in Europe and slack demand from Asia. One broker said rates for modern two-stroke ships have crashed by $100,000 per day in a week.
Spark Commodities saw sharp declines in its TFDE rate assessments this week with both basins down more than 20%, chief executive Tim Mendelssohn said, as longer-than-expected delays to the Freeport LNG plant and continued reduction in floating storage have freed up vessels for the spot market.
The Spark30S Atlantic fell $99,500 per day to $375,750 per day, while the Spark25S Pacific crashed back $97,000 per day to $356,250 per day over the week.
But in contrast, brokers said period business remains healthy, although there is little being concluded at present.
