GasLog Sees LNG Shipping Market Tightening
Monaco-based LNG fleet operator GasLog sees the market conditions improving, as more LNG is coming to market and is being snapped up in Asia and Europe, it said November 2 as it reported record revenues of $131.2mn for Q3.
These were up from last year’s $120.7mn, and the company moved into the black with profits of $24.2mn, compared with last year’s loss of $16.4mn. Earnings before interest, tax, depreciation and amortisation (Ebitda) were $89.6mn, up from last year's $80.8mn.
CEO Paul Wogan said GasLog "achieved record revenues and Ebitda in the quarter as a result of high uptime across our chartered fleet and a gradual improvement in the earnings on our spot vessels.
During the quarter, it completed the sale of the GasLog Geneva to GasLog Partners and announced the dropdown of the Solaris, the third dropdown this year, which closed in Q4. "These transactions demonstrate our continued ability to recycle liquidity from the partnership to GasLog, which we can then use to grow our LNG carrier and FSRU businesses."
He said GasLog continues "to make good progress on the Alexandroupolis LNG terminal in Greece, where Depa has signed a co-operation agreement for its participation in the project, which is being developed by Gastrade. The agreement also includes next steps for Depa to participate in the share capital of Gastrade."
On the LNG market, he said that in contrast to recent years, the "shoulder months" of September and October have seen strong LNG demand and higher prices in Japan, South Korea and China.
He said: "We expect that the re-emergence of significant gas price differentials between the US, Europe and Asia will stimulate more inter-basin trade and will result in longer average voyage distances, which is positive for LNG shipping.
"In the short-term LNG shipping market, spot rates have been consistently higher in 2017 than in 2016 as an increasing number of fixtures have led to higher utilisation, a return of round trip economics and an increase in customers looking for multi-month charters. We expect this trend to continue and strengthen as we enter the Northern Hemisphere winter.
"With five vessels currently trading in the spot market through 'The Cool Pool Limited' and with five newbuild vessels scheduled to be delivered in 2018 and 2019, GasLog has the potential to achieve growth in revenues and Ebitda as a result of organic growth and the improving market environment."
William Powell