US-listed KNOT Offshore Partners would rather keep hold of shuttle tankers coming off term deals.
Earnings from refixing the vessels in tightening markets will outstrip any profit from selling them and recycling capital — for now, chief executive Derek Lowe told an earnings call.
The company’s 59,000-dwt Dan Cisne (built 2011) and Dan Sabia (built 2012), and the 123,000-dwt Hilda Knutsen and Torill Knutsen (both built 2013) are all being marketed for new charters in Brazil or the North Sea.
The two smaller ships are also being circulated for a potential sale.
Lowe was asked whether rising asset values made it a priority to offload the duo, one of which has been operating in the conventional tanker market after being redelivered from a previous charter in December.
“I wouldn’t say it’s a priority,” he replied.
“And we think any shuttle tanker is better equipped to earn higher rates in the shuttle tanker market rather than in the conventional market. So our interest is in actually operating vessels in the shuttle tanker market. And we’re marketing them as such,” Lowe said.
The CEO said there is a gap in utilisation coming up which he is seeking to fill.
“So it’s a function of how well we secure or negotiate contracts for them,” Lowe added.
“Our preference is to secure medium and longer-term shuttle tanker work. So the conventional work is pretty much spot market for the [Dan] Cisne. We don’t see it as a strategy and anything other than the near term to deploy into that market,” he explained.
He said utilisation figures for the Dan Cisne will come through in the first-quarter results.
The spin-off of Norway’s Knutsen NYK Offshore Tankers said it is in “active" talks with both existing charterers and others, including the parent.
“While the Dan Cisne and Dan Sabia stand out among the partnership’s fleet as being of a smaller size than is optimal in today’s Brazilian market, we remain in discussions with our customers and continue to evaluate all our options,” the company added.
