LNG shipowner Dynagas LNG Partners is in no rush to grow its six-ship fleet, despite the roaring freight market, but could be inching closer to moving ahead with expansion.
Answering questions in a third-quarter results briefing chief executive Tony Lauritzen described the company as being in a "steady state".
"Time is on our side here. We don't feel pressured to do anything," he said.
Lauritzen acknowledged that Dynagas' six-ship LNG carrier fleet is fully chartered out and said the company will be using the cash flow to reduce its debt.
But he added: "The point that we will do something is getting closer, and we will evaluate what that would be, but some form of growth seems to be the more nearby solution."
Next availability
This is the first hint at a potential for fleet expansion for the company which has made a focus of continuing with its rolling time-charter business for its fleet.
Dynagas reported 100% utilisation for its fleet in the three months — the sixth consecutive quarter in which it has done this.
During the quarter it reported a fresh time-charter for its 155,000-cbm Arctic Aurora (built 2013) with the ship's existing charter Equinor which followed in direct continuation with the expiry of the previous fixture on 15 September. The ship has been fixed to Equinor since 2013.
Dynagas Partners fleet of six LNG carriers — five of which are ice-class 1A vessels, have an average age of about 11.3 years and are chartered out to Equinor, Gazprom and Yamal LNG.
Lauritzen said the company's earliest potential availability will be in the third quarter of 2023 when the Arctic Aurora's charter ends. Next up will be the 149,700-cbm Clean Energy (built 2007) in 2026.
He said the fleet is 100% employed for the remainder of this year, for 2022 and 96% for 2023.
Demand increasing
Lauritzen said that although Dynagas Partners does not have any immediate shipping availability, the market has seen a very strong spot market, along with medium and long-term time-charters concluded at higher levels than in the last few years.
"It appears that it is increasingly recognised that natural gas forms part of the solution for lowering greenhouse gas emissions," he said. "In response, we expect to see an increase in new LNG projects and an increase in demand for LNG shipping."
Dynagas reported net income of $11.3m for the third quarter, up from $10m in the same period of 2020.
Chief financial officer Michael Gregos said the improved figures were due to decreased finance costs and operating expenses, plus slightly higher voyage revenues for the quarter.
Voyage revenues for the three months showed slight gains at $34.7m against $34.3m in the third quarter 2020.
"Going forward, we intend to continue our strategy of using our cash flow generation to deliver our balance sheet, reinforce our liquidity and generate cash as to build up equity value over time, which will enhance our ability to pursue future growth initiatives," Laurtizen said.
