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Coolco said on Wednesday that chartering activity in the first quarter remained subdued.
“Long-term charterers have responded by pushing out their requirements in the expectation that nearer-term cargoes can be transported with vessels from the spot market,” the firm said.
Nonetheless, CoolCo found “near-continuous employment” in the spot market for one of its newbuild vessel Kool Tiger, whilst a long-term charter is pursued.
In October 2024, CoolCo took delivery of the 174,000-cbm Kool Tiger from South Korea’s Hyundai Samho Heavy Industries and simultaneously entered into a sale and leaseback financing arrangement with a subsidiary of Huaxia Financial Leasing.
Under this financing arrangement, CoolCo has options to repurchase the LNG carrier during the ten-year lease period and an obligation to repurchase the vessel at the end of the lease period.
The sale and leaseback facility matures in October 2034.
Kool Husky and Kool Glacier
CoolCo said the “excellent” performance of its LNG carrier Kool Husky after its performance upgrade to LNGE specification has resulted in CoolCo securing floating rate employment until 2028, starting in the third quarter of 2025.
The vessel will trade in the spot market from its redelivery in April, until its delivery onto this new time charter, CoolCo said.
Kool Husky entered drydock during September last year. This was completed along with upgrades for LNGe specifications in October.
These LNGe upgrades included a high-capacity sub-cooler retrofit, an air lubrication system, and various minor performance enhancements.
Moreover, CoolCo’s LNG carrier Kool Glacier, after receiving LNGE upgrades, has secured fixed-rate employment for twelve months, starting from late April 2025, according to CoolCo.
The company said that Kool Glacier entered drydock in January, which was completed along with upgrades for LNGE specifications ahead of schedule in March.
CoolCo did not reveal the names of the charterers.
Subsequent to the quarter, the LNG carrier Kool Blizzard completed its drydock and LNGE upgrade within 40 days.
CoolCo said these LNGE upgrades include a high-capacity sub-cooler retrofit and various other performance enhancements.
LNG fleet
CoolCo has seven TFDE LNG carriers it acquired from Golar LNG and the four LNG carriers it purchased from its largest shareholder Eastern Pacific Shipping.
Besides these vessels, CoolCo purchased two newbuild LNG carriers from EPS, and they feature GTT’s Mark III Flex membrane cargo tank system, reliquification, air-lubrication, and shaft generators.
The shipping firm exercised its option with affiliates of EPS Ventures in June 2023 to acquire newbuild contracts for the two 2-stroke LNG carriers.
In May last year, CoolCo entered into a 14-year charter deal with India’s largest gas utility GAIL for one of the newbuild LNG carriers currently under construction in South Korea.
The vessel in question is Kool Panther, now named GAIL Sagar.
CoolCo took delivery of GAIL Sagar in January this year.
The vessels started its long-term charter with GAIL after a delivery voyage to the US Gulf during the Quarter, with GAIL having the option to extend the charter by two additional years beyond the firm fourteen-year period, CoolCo said.
CoolCo also said it entered into a sale and leaseback financing arrangement with a subsidiary of Huaxia Financial Leasing for the newbuild LNG carrier.
Under this financing arrangement, CoolCo has options to repurchase GAIL Sagar during the fourteen-year lease period and an obligation to repurchase the vessel at the end of the lease
period.
The sale and leaseback facility matures in January 2039.
Results
CoolCo generated total operating revenues of $85.5 million in the first quarter, compared to $84.6 million for the fourth quarter of 2024.
Moreover, the company reported a net income of $9.11 million in the first quarter, compared to $29.41 million in the first quarter.
CoolCo attributed the decrease primarily to the unrealized mark-to-market changes on its interest rate swaps.
The firm achieved average time charter equivalent earnings (TCE) of $70,600 per day for the first quarter, compared to $73,900 per day for the fourth quarter.
CoolCo said the drop was primarily due to an increase in repositioning expenses for its newbuild vessel, GAIL Sagar, before starting its long-term charter, and another vessel between its spot charters.
“Challenging” spot market
CoolCo CEO Richard Tyrrell said the company had an “active first quarter, marked by a vessel delivery, several vessels transitioning to new charters, and dry-dockings all contributing to modestly higher quarter-on-quarter revenue.”
He said that two out of CoolCo’s 13 vessels were exposed to a “challenging” spot market during the period, as high LNG prices and extensive restocking activity drove cargos to Europe, putting downward pressure on ton-mile demand.
“Given these conditions, we were pleased to deliver the GAIL Sagar onto its long-term charter and secure term employment for an additional two vessels,” he said.
“Looking ahead, we continue to expect not only a positive ton-mile impact from the normalization of LNG cargo flows between Europe and Asia, but also a significant increase in LNG volumes coming onto the water starting this year, as numerous projects are now on the verge of start-up – or already in commissioning – after years of development and construction,” he said.
“While widespread uncertainty related to geopolitics, tariff policy, and their impact on trade patterns remains a source of hesitation for certain charterers, the fixed and tangible nature of their long-term LNG transport needs is prompting a return to securing tonnage on a multi-year basis,” Tyrrell said.
He said the geopolitical environment is “favorable for new LNG projects, and even before the impact of these additional prospective volumes from new projects, we continue to expect a tightening market driven by post-FID LNG volumes coming online and the expected extensive scrapping of aging steam turbine vessels now completing existing charters.
“As this process unfolds, we intend to remain patient, disciplined, and focused on maximizing long-term shareholder value,” Tyrrell said.