Cheniere Energy struck on an option to charter a fifth ship from John Fredriksen-backed Flex LNG.
The deal will see the LNG exporter’s Cheniere Marketing International employ the 174,000-cbm Flex Aurora (built 2020) for 3.5 years.
Flex, a New York-listed LNG carrier owner, said the ship will begin its charter in the third quarter of this year.
The option was part of a deal forged by the two companies in April 2021 that saw Cheniere take four vessels on multi-year charters. The deal also included options to extend all the charters by two years.
The rates on the transactions were not disclosed.
The Houston LNG producer has already taken delivery of three of the Flex ships on contracts with minimum tenures of 3 to 3.8 years.
Flex said on Friday that the companies have agreed that the fourth LNG carrier in the deal will be the 174,000-cbm LNG carrier Flex Volunteer (built 2021), which will start its charter in mid-April.
The ship will commence that deal sooner than the originally planned start date in the quarter of this year, meaning the 3.5-year charter has been extended by 2.5 months
The Flex Aurora’s new charter means the Flex has no exposure to the LNG carrier spot market, with all of its 13 ships on period contracts and the earliest expiry in the fourth quarter of this year, according to the company’s latest annual report to the Securities & Exchange Commission.
But it also means the company could have secured a longer charter for its lone open vessel.
TradeWinds reported on Monday that Flex LNG chief executive Oystein Kalleklev told a Capital Link conference that charterers are asking to fix ships for lengthier time periods amid higher rates fuelled by Russia’s invasion of Ukraine.
“We’re seeing more inquiries this year for time charter durations of five, even up to 10, years. Usually, that’s not something you see in a spot market, where spot markets are at, let’s say, $60,000 and you can more than double that for a 12-month time charter,” he said.
The shipowner controls a fleet of vessels of between 173,000 and 174,000 cbm in capacity, all of which are fitted with MEGI or XDF two-stroke engines.
Spot rates for LNG carriers of this size have been holding at around $79,250 per day after rebounding in the wake of Russia’s invasion of Ukraine, though they remain far from the heights seen late last year, according to data from Clarksons.
