Flex LNG Sees Mixed 2018 Market

Norway-listed shipowner Flex LNG reported February 27 a net profit in the fourth quarter, following losses in both of the past two full years. It expects LNG tanker charter rates to firm but sees possible bearish signs too.

Net income in 4Q2017 was $1.3mn, compared with a net loss of $0.2mn in 4Q2016, said Flex LNG. Its net loss for full year 2017 was $10.4mn, much larger than its 2016 net loss of $1.8mn.

Flex says it controls a fleet of six LNG carriers. On January 9 and 11, 2018 it took delivery of newbuild tankers, Flex Endeavour and Flex Enterprise. The former last month began its 15-month firm time charter to Germany's Uniper, while Flex Enterprise was put into spot trade. It further expects to take deliver of a third newbuild, Flex Ranger, in May 2018. Flex LNG signed a $315mn secured term loan facility to cover some of the financing costs of these three ships on December 20 2017.

The company expects day rates for LNG tankers may improve during 2018 as further trains of Yamal LNG and the US project Cove Point come on stream but cautions that, of two other US projects: "Cameron LNG and Freeport LNG are experiencing delays and up to 28 vessels ordered for these projects might come to market ahead of their intended project. Charterers are adopting various strategies to address the anticipated idle time. Many of the Japanese-built vessels have agreed with the shipyards to delay delivery."

Flex also said it continues to "actively pursue opportunities to leverage its experience towards the implementation of floating storage and regasification unit (floating LNG import terminal) projects, but would not commit to any on a speculative basis: "FSRU projects will only be pursued where there is a tangible long-term contract with bankable counter-parties and project structures," it said.