LNG carrier operator Cool Company (CoolCo) has entered into a new time charter agreement for one of its TFDE vessels.
According to a statement by CoolCo, the 12-month time charter is with Santos Shipping Singapore and is scheduled to start in the first quarter of 2024.
CoolCo did not provide further information regarding the charterer or the name of the vessel.
Santos Shipping Singapore has been registered last year and is probably a new unit of Australian LNG player Santos.
In the third quarter of 2024, the chartered LNG vessel is expected to undergo its scheduled drydock, at which time CoolCo also intends to upgrade the vessel to LNGe specifications.
LNGe specification upgrades include the addition of reliquefaction capability via sub-coolers, as well as air lubrication systems and a range of optimizations and upgrades intended to enhance efficiency and reduce emissions.
In line with the anticipated enhanced performance profile of the vessel following the LNGe specification upgrades, the charter includes an “innovative commercial mechanism to reward both the charterer and CoolCo,” the firm said.
Fleet fully employed until end of Q2
CoolCo has seven TFDE LNG carriers it acquired from Golar LNG and the four LNG carriers it purchased from its largest shareholder EPS.
Last year, it exercised its option with affiliates of EPS Ventures in June to acquire newbuild contracts for two 2-stroke LNG carriers scheduled to deliver in second half of 2024.
The company also manages 16 vessels, including LNG carriers and FSRUs, according to its website.
The Santos charter takes CoolCo’s fleet utilization to 100 percent until its next vessel becomes available, not before the end of the second quarter, it said.
This enables CoolCo management to extend its total operating revenue guidance to $88-89 million for the first quarter of 2024 ($99 million in Q1 2023) and $84-85 million for the second quarter of 2024 ($90 million in q2 2023), subject to no technical off-hire.
CoolCo said the anticipated lower expected revenue range in the second quarter of 2024 is primarily related to off-hire during a scheduled drydock of another vessel that is expected to be completed within the same quarter.
The Q1 2023 comparison period includes a contribution from the Seal, a vessel that was sold in q1 2023, the firm said.
“We are delighted with this innovative agreement that provides and aligns incentives between the owner and the charterer, which is expected to enhance efficiency and minimize emissions on one of our modern TFDE vessels,” said Richard Tyrrell, CEO of CoolCo.
“This groundbreaking charter is the first to incorporate our LNGe upgrade and our first with Santos. It serves as a model for joint participation in the benefits of our investment in upgrading existing vessels,” he said.