John Fredriksen’s Flex LNG has tied up a one-year time charter with a super-major as it continues to position for a strong market in the future.
Oslo-listed Flex said the contract would begin in the current quarter but further details were kept under wraps.
Oystein Kalleklev, chief executive of Flex LNG, told TradeWinds: “This contract basically gives us the best of two worlds.
“We get full utilisation on a time charter basis and still keep the exposure to the underlying market where we think the rates will go up.”
Kalleklev said the LNG spot market was maturing and was expected to become very tight down the line after the transitional year of 2018 where rates rebounded from four weak years.
Flex has four ships on the water and will take delivery of two more this year, five in 2020 and the final two newbuildings in 2021. Of that stable of 13 ships, 11 are open to the market.
“Everybody can buy a vessel and fix it on a seven to 10-year charter, but not everybody can take this kind of view on a market or asset class,” Kalleklev said.
“We have the guy with the best track record in this industry, and he has belief in it. We share his view and are executing the strategy accordingly.”
Flex did not name the vessel involved in the latest deal, the rate or any related financial details in a statement to the Oslo Stock Exchange.
Analysts at Arctic Securities said the one-year rate for a fifth-generation LNG carrier was currently in the mid-to-high $80,000s per day.
“As long as we have this strong balance sheet and sponsor we can afford to take some risk,” Kalleklev said.
“Rather than charter out vessels for seven to 10 years, we want to be open in the market and trade the vessels with underlying exposure and go short on contracts.
“Then, when the market is at attractive levels we do some longer term contacts.”
