Flex LNG has explained how big arbitrage opportunities are bolstering the LNG carrier market this year.
In an update on Wednesday, the John Fredriksen-controlled shipowner said a single cargo of gas loaded in the US is worth $144m more when it arrives in markets where prices are much higher, like Europe and the US.
Cargoes can be worth up to $200m.
And Flex LNG believes the weather will work in its favour this year.
A forecast from the US National Oceanic and Atmospheric Administration’s (NOAA) Climate Prediction Centre is predicting above-average hurricane activity in the remainder of 2022.
This could disrupt US LNG exports, thus further tightening the LNG market, Flex LNG said.
The company has now fixed all its 13 ships on longer-term time charters.
This gives a firm backlog of 54 years, with another 28 years of options.
Revenue in 2022 is expected to be similar to healthy levels in 2021, the company added.
But next year, revenue and time charter equivalent earnings should rise given the 100% fleet coverage, the Oslo-listed shipowner believes.
Revenue outlook revised
In June, the company announced $750m of new deals for three carriers, adding 24 years of fixed hire.
It has now updated revenue forecasts as a result.
In the second quarter, revenue will hit $85m, up from an earlier estimate of $80m.
For the July to September period, this will grow to $90m and reach up to $100m in the final three months of the year.
“Significantly reduced” spot exposure dragged down revenues in the first quarter of 2022, due to the pull of US cargoes to Europe in this period, the owner said.