Eastern Pacific Shipping-led Cool Company (CoolCo) expects to fix two of its tri-fuel diesel-electric (TFDE) LNG carriers which will shortly come off-hire at strong rates.
Speaking during an initial first-half results call, new CoolCo chief executive Richard Tyrrell said the company is seeing an increased number of opportunities in the term market for TFDE LNG carriers.
He said one-year time-charters are “quite liquid” compared to what they have been in the past and CoolCo is “making the most of that”.
In addition, the company is seeing requirements for three and five-year period hires albeit at slightly lower rates.
Tyrrell highlighted that the company has already fixed two of its eight-ship TFDE fleet on “stronger energy crisis era charters” which will feed into its results going forward.
He said the company now has six vessels remaining on more “legacy type rates” which it would expect to see improve once they are moved to new business.
The CEO said CoolCo has LNG carriers coming open in the four quarter of 2022 and the first three months of 2023.
Tyrrell said he is “excited” about these opportunities because they come at a strong time for the market.
“I think we will see quite a sizeable price reset as a result,” he said.
Securing fresh charters for the upcoming two ships — CoolCo did not name any of the vessels — would see half the company’s ships fixed at stronger rates.
Tyrrell said the remaining four ships are due to come off-hire “over time”, adding that the company would expect that charterers would exercise their options on these vessels.
“The ability to build a portfolio of charters that have different durations is a key part of our strategy,” he said.
Tyrrell said spot market rates have also improved over the past few weeks — partly on the news that the Freeport LNG project in the US is expected to restart — which is positive as the market moves into the strong winter season for LNG shipping.
He said he genuinely believes that the energy crisis has fundamentally changed the LNG carrier market.
Tyrrell spoke about the synergies with now floating LNG-focused shareholder Golar LNG, saying the company will need ships for its FLNG business.
He said Eastern Pacific Shipping, which owns a 40% controlling stake , brings the shipping experience to the table.
Tyrrell highlighted that EPS owns a huge fleet and one of the largest orderbooks.
He said this gives Cool Co access to the yards and deal flow
“Both those things are important because as well as targeting improved rates going forward we also want to grow and consolidate this market.”
Tyrrell described LNG as being on “quite a wild ride at the moment”.
He said on Friday an LNG cargo was worth $300m, although prices have since reduced this to nearer $250m. But it compares with a pre-energy crisis value of around $40m.
He said in this environment charterers cannot afford to be short on shipping and while more LNG will eventually become available in the market, he believes the strong market will persist for the next couple of quarters and through an extended winter season this year.
CoolCo controls a fleet of eight owned TFDEs. The company also technically manages 21 vessels including FSRUs and ships recently acquired by EPS
