John Fredriksen’s Flex LNG has locked away one of its 13 LNG carriers until 2027 after a major trading house confirmed a charter extension.
Flex said a “super major” has exercised its first extension option on the 173,400-cbm Flex Resolute (built 2020).
It was originally fixed on a three-year time charter on 1 November 2021, which began in January 2022.
The deal included the option to extend the hire by four years under a pair of two-year periods.
At the time, TradeWinds reported that the Flex Resolute and sister ship Flex Courageous (built 2019) had been fixed by BP as the major swooped in to snaffle up five modern LNG carriers on term deals.
Brokers said BP had fixed the two Flex ships at rates in the high $80,000-per-day region for the firm three-year periods.
Following the declaration of the option period, Flex said the Flex Resolute was on a fixed hire contract until at least the first quarter of 2027.
The charterer will then have a final option to extend the time charter by a further two years until 2029.
Flex LNG chief executive Oystein Kalleklev said: “Flex LNG is well positioned with 95% charter coverage for 2024 and about 50 years of firm backlog.
“We have one ship, Flex Constellation, coming open this year during the second quarter, when the freight market usually starts to tighten again after the seasonal adjustment coming out of the winter.”
This month, trader Trafigura told the company it would not be taking up its three-year extension option on the Flex Constellation.
Announcing this but without naming the charterer, Kalleklev said the company believes the vessel is well positioned to be re-contracted at more attractive levels than the previous contract.
Market to tighten
In November, Flex indicated it was upbeat about fixing its LNG carriers that are next to come open at stronger rates.
Aside from the Flex Constellation, on a third-quarter results call, Kalleklev said the 174,100-cbm Flex Ranger (built 2018) is the outfit’s first available vessel and will be fully open at the end of the first quarter of 2027.
He also said the company expects charterers will declare the options they are holding on other vessels.
LNG analysts expect the market to tighten from 2026 as more LNG production comes online.
Some suggested trading could prove weaker this year as newbuildings deliver ahead of new liquefaction. But the longer voyage reroutings to avoid the Red Sea and Suez Canal, along with congestion and lower transit slots for the Panama Canal might, if sustained, change the market dynamic.
