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Flex LNG’s interim CEO Marius Foss said in the company’s third-quarter results report on Wednesday that the “charterer of Flex Volunteer decided not to exercise the one-year option, and we expect her to be redelivered in late December this year, where she will go straight into drydock for her five-year special survey and thereafter be marketed for new employment.”
“While this year’s winter season began on a sluggish note, we are encouraged to see spot rates for modern tonnage in the region of $60,000-70,000 per day,” he said.
Foss did not name the charterer of the vessel.
In 2022, US LNG exporting giant Cheniere and Flex agreed that the 2021-built, 174,000-cbm Flex Volunteer would be the fourth ship chartered under their agreement.
The time charter is for approximately 3 years and 8 months.
Sale and leaseback deal completed
Flex LNG has also completed its previously announced sale and leaseback deal with an Asian-based lease provider for the 173,400-cbm LNG carrier Flex Resolute.
Under the terms of the agreement, the vessel was sold for $175 million, with a bareboat charter back of 10 years.
Last year, Flex agreed with UK-based energy giant BP new charter deals for Flex Resolute and Flex Courageous.
“In September, we finalized the refinancing of Flex Constellation and Flex Resolute, marking the completion of our balance sheet optimization program 3.0,” Foss said.
“In total, the program has delivered $530 million in new financings this year on attractive terms, extending our next debt maturity to 2029 and releasing $137 million in net proceeds. As of the end of the third quarter, we recorded an all-time high cash balance of $479 million,” he said.
Drydockings, scrapping activity
Foss said that the company’s third-quarter revenues came in at $85.7 million, with a TCE rate of approximately $70,900 per day.
He stated that Flex completed the dry docking of two vessels during the quarter, and Flex Artemis traded in the spot market.
“We have completed all of the four planned drydockings for 2025, on time and within budget. Looking ahead, we plan to complete three drydockings in 2026: Flex Volunteer, Flex Freedom, and Flex Vigilant,” Foss said.
Foss noted that 2025 has seen record-high FIDs for new liquefaction capacity, with nearly 70 mtpa of additional capacity sanctioned, and this is supported by what could be the strongest year for long-term SPA contracting since 2011.
In addition, US LNG export volumes are up more than 20 percent so far this year through an “impressive ramp up of new export capacity and higher utilization, which has helped absorb available tonnage.”
“We expect the short- to medium-term freight market to remain challenging, with newbuild deliveries occurring before new export capacity comes online,” he said.
“However, we are finally seeing a notable increase in scrapping activity, among older and less efficient steam vessels, with 14 scrapped year-to-date. With nearly 120 steam vessels either open or rolling off contracts over the next few years, we expect a wave of further retirements ahead,” Foss said.
“Despite near-term market softness, Flex LNG remains well positioned, supported by a robust balance sheet and a substantial charter backlog,” he said.
