GasLog: LNG Day Rates Rise, Greek Progress

Monaco-based shipowner GasLog has reduced its 2Q losses, it said August 2, and signaled a sharp improvement in LNG tanker day-rates, plus progress with its Greek floating LNG import project.

Overall LNG imports into China had risen by 50% year on year in first half 2018, it said of the wider market.

Global LNG demand growth of 9% in 2018 and 13% in 2019 was expected to lead to a “rapidly tightening LNG shipping market,” GasLog’s presentation said. CEO Paul Wogan said: “We now have five newbuilds on order for delivery in 2019 and 2020, three of which have committed multi-year charters, while the two uncommitted newbuilds are expected to deliver into an attractive LNG shipping market."

“The longer-term supply and demand fundamentals for LNG remain very positive, with China’s LNG imports, in particular, increasing 50% year-on-year in the first half of 2018,” with double-digit growth in South Korean and Indian LNG imports too, he added, saying that should encourage final investment decisions (FIDs) on new liquefaction projects in the next 18 months.

It cited that shipbrokers Clarkson had reported LNG shipping day-rates averaging $54,000/d in 2Q2018, compared to $34,000/d in 2Q2017 - and that during 2Q2018 rates exhibited counter-seasonal strength, rising to $87,000/d in late June from $38,000/d in late April. 

GasLog itself said its loss in 2Q narrowed to $3.6mn, from $7.5mn in 2Q2017; the latter had included a $9.7mn loss on ‘derivatives’, whereas this 2Q it made a gain.

Plans for Greece's second LNG terminal

On its plan to install a floating LNG import terminal at the northern Greek port of Alexandropoulis, GasLog said it continues to anticipate FID at end-2018. He did not comment on a previous targeted start-up by 2020. A late 2018 FID is consistent with what GasLog announced earlier this year, but is a year later than the late 2017 FID expected by its Feed contractor in the middle of last year.

GasLog reported “continued progress on a proposed equity participation by [Greek supplier] Depa and Bulgarian Energy Holding”, anticipated near-term solicitation of expressions of interest in offtake capacity in the project, and said potential EU funding and bank financing is “progressing well.”  Depa agreed May 2 to reserve capacity at Alexandropoulis and said it might take equity too.

Greece has an existing (onshore) LNG import terminal at Revythoussa, near Athens, owned by national gas grid operator Desfa.