John Fredriksen’s Flex LNG has found work for its first newbuilding at the same time as securing funding for three new vessels.
Uniper Global Commodities has taken the 173,400-cbm vessel from delivery in January for a period of 15 to 18 months.
Jonathan Cook, chief executive of Flex, says: “The deal will provide Flex LNG with full utilization of the vessel from day one without idle time or costs normally associated with the maiden voyage for a newbuild LNG carrier.”
While a rate for the new vessel was not disclosed, analysts at DNB Markets suggest a figure of $58,000 per day.
“While in line with our estimate, the contract could be perceived as on the soft side given the strength of the spot market ($82,000 per day), but ex. yard comes with a discount,” wrote its analysts led by Nicolay Dyvik.
“The contract is in line with the company’s announcement post third quarter that it was looking to fix for six to 18 months to leave the ship open by mid-2019, when it expects an even stronger market.”
Loan locked in
Flex says a term loan for the first three newbuildings has now been closed. It first announced proposals for a $315m term loan facility had been received in November, secured by three of six newbuildings with delivery in the first half of 2018.
Six lenders are involved, with debt maturing over five years. Two of the LNG carriers are coming from DSME and one from Samsung.
The company has raised over $200m in 2017 after transferring its listing to the Oslo Stock Exchange from a junior market.
It has sights on becoming a leading player in the LNG and FSRU markets, and has six newbuldings at DSME and Samsung Heavy Industries for delivery through 2019.
It also has LNG carriers on charter from John Angelicoussis and Sovcomflot, which are fixed out.
Positive outlook
“The LNG shipping market is expected to tighten significantly with an estimated decrease in available tonnage of 57 vessel equivalents in the period until 2020 on conservative assumptions,” according to a presentation from December on its website.
It notes 90% of the LNG carrier newbuildings built by 2020 are committed on long term charters.
The presentation says the company is actively pursuing opportunities in the FSRU market.
Cook was a founding partner at Excelerate Energy and is a former chief marketing officer for Cardiff LNG, with the company’s management involved in 13 of the existing 21 FSRU projects worldwide, the presentation says.