International Seaways is eyeing up time charter opportunities in both the crude and product tanker market alongside potential expansion of its LNG fleet.
New York-listed Seaways spent $600m in renewing its tanker fleet in 2018 and is confident of a recovery backed by supportive supply and demand dynamics.
Lois Zabrocky, chief executive of International Seaways, says the company is encouraged by the strength of the tanker market in the fourth quarter of 2018 and how the market is developing in 2019.
“While the exact timing for a sustained rate recovery is not yet clear, the market has continued to strengthen in Q1 and we see optimistic signs supporting a balanced tanker market in the near-term,” she said on the company’s quarterly earnings call.
Zabrocky identified IMO 2020 rules and rising US exports as “game changers” for the crude tanker market, with the second half of this year expected to see longer period charters of up to three-years at healthier rates.
“Then, indeed, we'll look hard at those numbers,” Zabrocky said.
In the product tanker market, Seaways is looking to add time-chartered tonnage at a time older panamax vessels continue to earn their keep.
“We are opportunistically looking that with the market volatility we may be able to add more tonnage on the smaller side through charter in,” Zabrocky said.
Open to LNG expansion
While it is best known for its crude and procuct fleets, Seaways is also active in the LNG market with four vessels owned in partnership with Nakilat.
With Qatar known to be exploring a vast LNG carrier newbuilding drive, Zabrocky said the company was in constant communication with Nakilat and Qatar Gas.
“Our existing vessels are operating fully utilized. And if we see an opportunity in the future, we're definitely open to that,” she said.
“Right now, we still feel like we have some work to do on strengthening our conventional tanker fleet base, but LNG is something which obviously will be growing a lot in the future and we watch it very closely.”
The comments came after Seaways yesterday reported a strong fourth quarter, which analysts at Arctic Securities say offered a taste of the company's earnings capacity.
Earnings per share of $0.32 for the quarter was better than the $0.14 consensus.
