GLNG » Topics » Shipping

This excerpt taken from the GLNG 6-K filed Dec 2, 2009.

Shipping

The spot LNG shipping market will continue to face some challenges in the short term due to a limited oversupply of vessels. The order book as at the end of 2010 is limited to 3% of the total fleet. The vast majority of new vessels will be delivered into specific projects.

Trading performance of the Company’s vessels operating in the spot/short term market improved over the quarter. Rates and utilisation are still unsatisfactory but improvement continues into the fourth quarter. Available tonnage in the Atlantic has tightened over the quarter with very few vessels available cold for the recent tenders. Several majors have recently been in the market chartering in medium term tonnage

Charter arrangements are now becoming more balanced and exhibiting less multiple options and lower flexibility in charterer's favour than has been evident throughout the year.

There are clear signs that an improved supply demand balance in the years to come will lead to a much needed improvement in charter rates. However the current weak demand for natural gas is negatively influencing the short to medium term demand for LNG.

This excerpt taken from the GLNG 6-K filed Aug 31, 2009.

Shipping

Trading performance of the Company’s vessels operating in the spot/short term market weakened over the quarter as was expected. Rates have been depressed due to a reduction in demand for LNG (especially in the Far East) and an oversupply of LNG Shipping tonnage due to project delays and LNG plant outages.

However, there are some demonstrable signs of improvement with a number of FOB cargoes soaking up spot market tonnage in the Atlantic basin, new LNG production ramping-up or coming to market over the next few months and increasing use of floating storage. This should ease the vessel over-supply, especially the growing disparity in demand for shipping between the East & West markets which has become evident over the last month or two. With an already limited amount of tradable tonnage in the West any vessels employed to load Atlantic Basin cargoes will change the scenery of the market and should provide (along

 


1 Based on current operating cost expectations
2 Based on current interest rate swap rates and an assumed rate for libor of 3.5%

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with Terminal compatibility issues and an increased need for economic and efficient vessels due to eroding commodity margins) an upward price push as we move into the Autumn and Winter period.

Indeed, two of the Company’s vessels, Golar Arctic and Ebisu, have recently been fixed on short-term charters from mid-August after prolonged periods of idle time at rates above those seen in the second quarter.

The longer term LNG Shipping market is becoming interesting with Australian developments on both East and West coast leading the way and BG currently in the market for up to two vessels for between 2 and 8 years. Additionally there have been no orders so far this year for LNG tankers (and only six placed in 2008). Furthermore, only two tankers are scheduled for delivery in 2012 and there are indications are that some new supply projects are also considering employing existing tonnage rather than ordering new vessels.

This excerpt taken from the GLNG 6-K filed May 29, 2009.

Shipping

Trading performance of the Company’s vessels operating in the spot/short term market deteriorated over the quarter in line with the deterioration of the market. Rates are depressed due to a reduction in the demand for LNG, particularly in the Far East, coupled with an increase in the available fleet in advance of projects starting up. However, as new LNG production comes to market over the coming months should ease the vessel over supply.

Golar Frost was redelivered to OLT-O on May 27. The vessel will be converted to a FSRU in Dubai docks with the conversion being managed directly by the OLT-O joint venture. The company has no further exposure to the utilisation of this vessel.

Golar Freeze is expected to be redelivered from BG at the conclusion of her long term charter in early June. The vessel will seek short term employment opportunities in advance of commencing her FSRU conversion scheduled for early September. Golar Freeze will, on completion of her FSRU conversion, commence a 10 year charter in Dubai during Q2, 2010.

Vessel operations remained smooth and incident free throughout the quarter.

This excerpt taken from the GLNG 6-K filed Mar 2, 2009.

Shipping

Trading performance of the Company’s vessels operating in the spot/short term market was slightly improved over the quarter. Rates held up for the early part of the quarter however began to soften toward year end. Further deterioration has occurred into the first quarter of 2009 although activity is just now beginning to again increase.

Granatina, now renamed Golar Arctic, was redelivered from a 12 month charter with Shell in January and the vessel’s technical management has been transferred to Golar. The Golar Arctic will continue to maintain the Company’s presence in the spot/short term market in the period following the delivery of Golar Frost in June 2009 to OLT-O for the Livorno FSRU project. Golar Frost was redelivered from its 4 month charter to Morgan Stanley in November 2008 and will continue to be available for short term charters until redelivery to OLT-O in June 2009.

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The new-build in-charter, Ebisu, remained on hire to the North West Shelf project throughout the quarter at a profitable rate.

Vessel operations remained smooth and incident free throughout the quarter.

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