Awilco LNG shrinks third-quarter net loss

Awilco LNG shrinks third-quarter net lossImage courtesy of Awilco LNG

Awilco LNG, a Norwegian based LNG transportation provider, reduced its net loss third quarter in the row. 

According to the company’s quarterly report, the net loss was cut from $10.1 million in the second quarter to $6.8 million during the quarter under review.

Freight income for the quarter reached $5.7 million in the third quarter, up from $2.6 million in the previous quarter.

LNG shipper’s fleet utilization also rose to 88 percent compared to 83 percent recorded in the second quarter. The company’s two 156,000-cbm LNG carriers have been operating in the spot market in 2017.

Heading into the winter season, the company noted that gas prices trended upward. The Far East gas price started the quarter at $5.5/mmBtu and ended at $8.4/mmBtu, with the UK NBP price rising from about $5.1/mmBtu to 5.5/mmBtu. The US prices, however, fell marginally from $3.0/mmBtu to 2.9/mmBtu.

“In Q4 gas prices for forward delivery have continued to improve in both Europe and Far East while spot prices in the US are unchanged, creating arbitrage opportunities leading to increased fixing activity,” the report shows.

Following increasing production volumes from new plants and the open arbitrage, LNG shipping rates increased during the quarter. It started with day rates reported at $41,000 and $33,000 West and East of Suez respectively, and ended at $47,000 and $39,000, according to Fearnley.

Going forward, Awilco said that the market firmed during the second half of the year, both in terms of utilization and rates.

“Headline rates in Q4 have moved beyond USD 50,000 per day for the first time since Q1 2015 due to increased LNG production, an open arbitrage, and fewer available vessels, and the current spot charter rate for December loading in the Atlantic has increased beyond USD 60,000 per day, according to Fearnley,” the report reads.

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Posted on November 17, 2017 with tags .

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