Cool Company has entered into a time charter agreement for one of its vessels with a new client.

The 12-month time charter with Santos Shipping Singapore begins this quarter.

“We are delighted with this innovative agreement that provides and aligns incentives between the owner and the charterer, which is expected to enhance efficiency and minimise emissions on one of our modern TFDE [tri-fuel diesel-electric] vessels,” said CoolCo chief executive Richard Tyrrell.

The charter takes CoolCo’s fleet utilisation to 100% until its next vessel becomes available, not before the end of the second quarter.

In the third quarter, the vessel is expected to undergo its scheduled dry-docking, at which time the Idan Ofer-controlled company intends to upgrade it to LNGe specifications.

“This groundbreaking charter is the first to incorporate our LNGe upgrade and our first with Santos. It serves as a model for joint participation in the benefits of our investment in upgrading existing vessels,” Tyrrell said.

LNGe specification upgrades include the addition of reliquefaction capability via state-of-the-art sub-coolers, as well as air lubrication systems and a range of optimisations and upgrades to enhance efficiency and reduce emissions.

CoolCo now guides for total operating revenue of $88m-89m for the first quarter compared with $99m for the same period last year.

The 2023 period includes a contribution from the 160,000-cbm Golar Seal (built 2013), which was sold in the first quarter of last year for $184.3m.

The guidance for second-quarter revenue is $84m-85m compared with $90m last year, subject to no technical off-hire.

The lower-than-expected revenue range is primarily related to off-hire during a scheduled dry-docking of another vessel that is expected to be completed in the second quarter.