John Fredriksen’s Flex LNG saw its shares race out of the gate in Oslo this morning amid suggestions of potential floating storage business in the market.
Flex stock saw its largest climb this year, rising by 6.5% in early trading in Oslo, Bloomberg noted.
While rates for conventional LNG carriers were flat last week at $54,500 per day, according to Poten & Partners, dynamics in the gas market could open up fresh business for shipowners.
Oystein Kalleklev, chief executive of Flex, noted gas prices in Europe have been at the lowest for a decade, pushing up volumes into Asia.
“The big contango in gas prices means traders are floating ideas about floating storage of LNG,” Kalleklev wrote on his LinkedIn profile.
“Flex LNG has only large, fuel-efficient, two stroke LNG carriers perfectly equipped to do the contango.”
Flex was trading up 5.19% at NOK 113.6 each, giving the company a market capitalization of NOK 6.15bn ($710m).
DNB Markets suggested the rise was due to re-circulated news from April about anti-terrorism measures on Japanese nuclear utilities, which could be a potential catalyst for second half of 2020 tonne-mile demand.
The stock is up by over one fifth in the past month, data from the Oslo Stock Exchange shows.
Flex took up a listing in New York this summer, heading to the US capital market in the same route favoured by Spotify.
According to Arctic Securities LNG carrier rates have been hovering in the $50,000s per day for about two months as near-term structural needs seem to be covered.
“Liquefaction projects ramping up exports, increasing structural needs, new tenders, an attractive gas futures curve, emerging storage opportunities and rising sailing distances are all factors that should bode well for rates in H2 and 2020,” they said in a report this morning.
