LNG shipowner Cool Company (CoolCo) calculates that the retirement of old steam turbine LNG carriers is set to create an additional demand for up to 20 vessels per year.

Speaking on a first-quarter results call, CoolCo chief executive Richard Tyrrell said the new LNG supply due to come onstream from the Americas and the retirement of the steamships are two factors that will drive LNG shipping demand.

Tyrrell said it is difficult to assess when the steamers will leave the fleet due to the many factors involved. But he said the best way is to assess the number of cubic metres that ships reaching 20 years old represent.

He said this gives an incremental demand for shipping of between 12 and 20 LNG carriers per year over the forthcoming period.

Tyrrell said he is receiving many questions about the large size of the LNG carrier orderbook, which now stands at about 50% of the fleet despite newbuilding prices rising to around $260m — up from about $190m in 2021.

He said today’s prices set the benchmark for other vessels in the sector and compares with the option to buy two on-order, 2024-delivering newbuildings at $234m each from its parent company, Eastern Pacific Shipping.

Tyrrell, who named these two vessels as the Kool Tiger and Kool Panther, said: “I fully expect these will be exercised by the deadline for doing so at the end of June this year.”

He said CoolCo experienced “some negative impact” from its two spot-linked LNG carriers during the first quarter.

He described the charter market’s start to 2023 as “miserable” due to the winter season finishing early and many sublet LNG carriers becoming available.

But he said the company is more focused on the term market, which has been “holding firm” and is set to be supported by a combination of seasonal storage and the reopening of price-sensitive markets such as China, India and Pakistan.

Tyrrell said he is “excited” about the upgrades that are being planned for CoolCo’s tri-fuel diesel-electric vessels to what the company is dubbing “LNGe” ships.

He said that aside from electric, the “e” can stand for emissions, environment, efficient, economics and life extension.

CoolCo detailed LNGe upgrade dry-docking guidance costs of $15m per ship for five vessels during the period from the third quarter of 2024 to mid-2025.

He said the upgrades will allow charterers to save up to $10,000 per day over the course of the year, depending on how the vessel is operated.

Tyrrell said CoolCo will look to be paid for that by the charterers, which will make the return on the investment “well above 10%”.

CoolCo listed on the New York Stock Exchange on 17 March.

Chief financial officer John Boots said that following this move, 63% of all the company’s shares are listed in the US, with the rest in Norway.