Norwegian LNG transportation provider Awilco’s losses deepened quarter on quarter for the first three months of the year.
The company reported a loss of $3.4 million for the first three months, dropping further from a $1.2 million loss in the fourth quarter of last year.
For the first three months of the year 2018, Awilco reported a $1 million profit.
Freight income for the quarter was $9.4 million, down from $11.1 million in the fourth quarter of 2018 due to muted demand in the Far East combined with seasonal effects.
Fleet utilization for the quarter ended at 90 percent, compared to 84 percent in the previous quarter (excluding scheduled off-hire), the company said in its report.
Awilco said that the mild winter, well-stocked inventories and ample supply has translated into a weak shipping market so far in 2019. Current spot rates are about $35,000 – 50,000 per day, but multi-month charters with delivery in the third quarter of 2019 are being concluded at considerably higher rates to provide for winter coverage.
At current gas prices the LNG energy equivalent to oil costs less than $30/bbl, and with Brent at around $70/bbl demand for LNG is expected to increase going forward.
A total of 83 mtpa of new LNG production capacity is expected to start up in 2019 to 2024 of which 68 mtpa in North America. New US volumes are expected to increase average sailing distances, and tonnage demand and supply looks balanced the next few years.
However, periods of volatility and seasonality should be expected, Awilco said.