Monaco-based LNG shipper GasLog reported a rise in profit during the third quarter of the year as the LNG shipping market tightened.
The company posted an $18.2 million profit for the period under review, compared to the $5.3 million in the corresponding quarter last year.
GasLog’s CEO Paul Wogan, said, “the LNG shipping market tightened considerably in the third quarter, driving headline spot rates to multi-year highs and delivering a record result for our ships operating in the Cool Pool.”
He further noted that together with three newbuilds delivered earlier this year, the fleet delivered record quarterly results.
“With further strengthening of spot rates in October, we anticipate another significant increase in our spot earnings during the fourth quarter of 2018, despite the time lag for headline rates to manifest themselves in spot vessel earnings,” Wogan said.
GasLog further noted in its quarterly report that LNG demand growth was strong and broad-based during the first nine months of 2018, growing 7 percent over the same period of 2017, citing data from Poten.
LNG supply grew by 8 percent year-over-year during the third quarter of 2018 and increased by 5% from the second quarter of 2018, according to estimates from Wood Mackenzie.
“Looking ahead, in our view, strong LNG demand, new sources of supply coming onstream and limited availability of shipping capacity over the near-term are combining to create the potential for the recent strength in LNG shipping spot rates to be sustained through at least early 2019,” the statement reads.
While a seasonal moderation in spot rates during the first half of 2019 might occur, this is not expected to be as pronounced as was the case in early 2018.
GasLog believes the LNG shipping fleet is set to experience very high levels of utilization in the near-term based on the current supply and demand projections and the build time of approximately two and a half years for new LNG carriers.
The company stressed that further shipping capacity will be needed over and above the current order book to satisfy projected demand from 2021 onwards.