Eastern Pacific Shipping (EPS)-led Cool Company (CoolCo) is starting to look at opportunities to grow its fleet after completing its set-up and putting a management team in place.
Taking questions in its first quarterly business update on 31 May, CoolCo interim chief executive Karl Fredrik Staubo was asked about the four former Sovcomflot (SCF Group)-controlled LNG carriers EPS interests had recently acquired in a bank sale.
Staubo described them as “highly attractive LNG carriers” with existing charters.
He said there are currently no agreements on those vessels between EPS and CoolCo beyond their technical management. But he said over time those are ships the company would consider to grow its fleet.
“Let’s see if there is a deal to be done in the future,” he added.
Staubo said CoolCo, which Golar spun off into a separate company with EPS in December, has been focused on the company’s set-up.
“Now, we are lifting our sights a bit and looking out to see what is possible to do,” he said.
CoolCo, in which EPS controls 38% and Golar LNG 31%, controls a fleet of eight tri-fuel diesel-electric (TFDE) vessels.
In addition to its eight owned vessels, CoolCo also manages 11 LNG carriers and nine floating storage and regasification units.
But Staubo said the company has no ambition to become a ship manager and will only focus on this to reap the benefits of economies of scale and for ships it can hopefully have as part of its owned fleet.
CoolCo said it achieved time-charter equivalent rates of $56,000 per day on its eight TFDE vessels during the first quarter of 2022.
The company also locked in one of its vessels for a 12-month charter at $120,000 per day to Polish charterer Polskie Gornictwo Naftowe i Gazownictwo (PGNiG) and said it secured a further multi-month charter with an increasing rate from about $60,000 per day to $100,000 per day.
It said 80% of its $320m of contractual revenue is based on fixed rates with the balance on floating rate charters. The company’s spot exposure rises to 50% by the end of 2023 and 80% at the close of 2024.
“We believe that the LNG market is structurally tightening,” Staubo said, with global LNG trade expected to increase by 40% in the run-up to 2030.
The interim chief said the shipyard is now only offering late 2026 delivery slots for LNG carrier newbuildings, at prices hovering around the $230m mark.
“We are committed to market consolidation,” he said.
Pressed by analysts, Staubo said if all of Europe’s pipeline gas from Russia were to be replaced with US LNG, then another 170 vessels would be required. But he questioned if there would be sufficient new LNG supply for this.
Staubo stressed how uncompetitive steam turbine LNG carriers will become from 2023 with the advent of the new emissions regulations. He estimated that 160 of the 220 LNG steamships will be phased out over the coming two to three years.
In its first set of quarterly results, CoolCo reported an operating income of $1m for the first quarter of 2022 and total operating revenue of 4.3m. But new chief financial officer John Boots said vessel revenues and operating expenses only covered four vessels for 20 days.
New chief executive Richard Tyrrell, who was formerly with Hoegh LNG, is expected to join the company on 1 July.