Golar LNG said it has recently fixed one of the company’s LNG carriers on a one-year deal, as charterers increasingly look for longer charters to secure shipping availability.
Tor Olav Troim-led Golar expects the new fixed charter to generate about $36.5 million of revenue. This equals about $100,000 per day.
The firm seasonal and cyclical strength of the LNG carrier segment remains “encouraging.”
According to Golar, increasing price arbitrages between LNG trading basins is driving up LNG freight rates in the short term.
“Increasing demand for LNG freight together with new environmental regulations impacting effective supply of LNG carriers from 2023 add support to the medium and long-term outlook,” the firm said.
To remind, Golar secured a five-year charter earlier this year for one of its vessels, boosting its shipping revenue backlog to $259 million.
Golar currently owns nine LNG carriers but also operates seven more. It also has one FSRU and operates eight of these units as well, according to its website.
Besides the LNG carrier and FSRU business, Golar LNG owns one FLNG conversion candidate and has majority stakes in the world’s first FLNG conversion, Hilli Episeyo, as well as Gimi FLNG conversion.
Besides the new charter deal, Golar revealed new arrangements regarding the Hilli Episeyo FLNG located offshore Kribi, Cameroon.
Hilli Episeyo started commercial operations in May 2018 under production tolling deals with Cameroon’s Perenco and SNH.
Russia’s Gazprom is the sole offtaker from the FLNG project taking 1.2 mtpa under an eight-year deal expiring in 2026.
Moreover, the gas giant is taking 50 percent of the vessel’s total 2.4 mtpa capacity produced from two trains.
The FLNG has in total four trains installed onboard and the partners have earlier this year agreed to boost utilization of the unit.
Golar said on Thursday it had entered into swap arrangements to hedge part of its TTF price exposure for the incremental 0.2 mtpa train 3 production for the first quarter of 2022 at a TTF price of $28/MMBtu.
“With TTF gas prices averaging $28/MMBtu during Q1 2022, the additional capacity utilization is expected to realize $21.2 million of net income to Golar for the quarter,” the firm said
This implies a gross tolling fee of $11.4/MMBtu for the incremental production.
“For each $1.00/MMBtu change in TTF, net income realized by Golar will increase (or decrease) by $0.4 million for unhedged volumes during Q1 2022,” the firm said.
Also, Golar is realizing increased net income from the Brent link component of production from the first two trains.
“Golar’s realized share of net income increases by $2.7m for every $1/bbl that Brent is above $60/bbl,” it said.
“Assuming the current oil price of approximately $83/bbl for 2022, net income realized from the oil derivative will be approximately $15.5m for Q1 2022 or $62m for the full year,” the firm added.