Norway’s Awilco LNG has increased its first-quarter profit in a market in which charterers are happy to sign up ships for the long term.

The Oslo-listed owner said net earnings to 31 March were $9m, against $5.97m a year ago.

Its two ships traded on fixed rate contracts for the entire quarter.

One began a new deal, meaning time charter equivalent earnings ended the period at $113,800 per day, up from $88,100 per day in the fourth quarter of 2022.

Chief executive Jon Skule Storheill said the contracts ensure solid earnings in a volatile LNG transport market.

“Despite low spot rates in this shoulder season, we see interest and rate levels for period charters holding firm and focus from charterers seems to be very much on security of supply going forward,” he added.

Revenue rose to $20.5m from $14m in the same period of 2021.

The company noted seasonal low demand following a mild winter with high gas storage in Europe.

This led to a significant drop in LNG spot charter rates that lasted throughout the quarter, although there are now signs of the market bottoming out, it added.

“The term market has maintained a healthy level and we see charterers willing to secure long-term tonnage as the focus on energy security is high throughout the world,” Awilco LNG said.

Strong demand to trump large orderbook

“Several new final investment decisions for new LNG production capacity have been made lately and we continue to see strong long-term demand for LNG shipping despite a large orderbook.”

Awilco LNG has one of its vessels coming off charter in the third quarter of 2024.

During the first three months, one to three-year time charter rates were lower on limited activity. But interest and activity have “increased somewhat” lately, it said.

Brokers assess one-year rates at $130,000 per day.

Charterers are seeing through the current soft spot market and focusing on securing tonnage for longer term commitments, Awilco LNG believes.

Nine newbuildings were delivered and three LNG carriers were sold for recycling during the first quarter, bringing the total fleet at the end of the quarter to 610 ships, according to Fearnley LNG.

Awilco LNG said: “For the remaining three quarters of 2023 and in 2024 we will see a relatively moderate number of newbuilding deliveries with 24 and 65 respectively, while 2025 and 2026 are expected to see record high deliveries.”