Expansion-minded Flex LNG is eyeing berth space for up to four LNG carrier newbuildings at Hyundai Heavy Industries worth at least $720m.
Market sources say the John Fredriksen-controlled company has pencilled in an order for two firm LNG carriers with an option on an additional pair of vessels. Some suggest a letter of intent on the ships has been signed, while others indicate that negotiations are at a "sensitive" stage.
A source in the Fredriksen camp confirmed to TradeWinds that the project had been discussed but said no firm deal had been done yet.
HHI officials declined to comment on the reports.
Brokers report that Flex has also been talking to DSME, where it has LNG tonnage on order.
Senior shipyard officials say enquiries on LNG carrier newbuildings have been rising on the back of an anticipated shortfall in vessels in the period to 2020 and current low newbuilding prices, which are expected to rise soon.
Oslo-listed Flex is in the process of finding work for its initial newbuilding haul.
In December last year, the company locked away the first of six vessels it had on order by signing a deal with Uniper Global Commodities to take the January-delivered vessel on charter ex-yard for a period of 15 to 18 months.
Uniper was already a key client for Flex after the shipowner fixed existing tonnage to the trader, which it had taken in to get experience and market exposure before its own newbuildings emerged.
Flex boasts an LNG fleet of six M-type, electronically controlled, gas-injection (ME-GI) newbuildings, which are due to be delivered between the start of this year and August 2019.
The first two — the Flex Endeavour and Flex Enterprise — are now in service, with Samsung Heavy Industries scheduled to hand over the 174,000-cbm Flex Ranger and Flex Rainbow in May and June, respectively. A further two DSME-built vessels — the Flex Constellation and Flex Courageous — are due to follow in June and August 2019.
Flex chief executive Jon Cook, who is due to make a presentation on the Oslo-listed company at an investor day meeting on 27 February, was unavailable for comment this week.
He has spoken previously about taking on charters with the existing ships it has been offering, with a view to swapping in one of the company’s newbuildings at a later date.
Cook said he believed the LNG market would rebalance from the end of 2018 and into 2019, and talked about visible upcoming enquiry for additional period LNG tonnage from 2020 onwards.
He added that Flex was interested in making a move into the floating storage and regasification unit sector and had full specifications drawn up with shipyards.
