Dynagas LNG Partners posts higher profit in Q1

Dynagas LNG Partners, the owner of six LNG carriers which operate under long-term charters, reported a rise in its quarterly profit.

The limited partnership formed by shipowner Dynagas posted a net income of $23.9 million for the three months ended March 31, 2022.

This marks a rise of $8 million, or 50 percent compared to January-March in 2021, the LNG shipper said in a statement.

Dynagas LNG Partners attributed this to the increase in the gain on the company’s interest rate swap transaction compared to the corresponding period of 2021.

Net income also rose compared to the prior quarter of $10.6 million.

Voyage revenues for the three-month period hit $33.3 million. This compares to $33.4 million for the corresponding period of 2021.

The partnership reported average daily hire gross of commissions of about $63,130 per day per vessel in the three-month period ended March 31, 2022, compared to $62,250 per day per vessel for the corresponding period of 2021.

During both three-month periods, the partnership’s vessels operated at 100 percent utilization.

LNG carrier trio now controlled by German government

Gazprom has chartered three vessels from Dynagas LNG Partners, Novatek’s Yamal LNG two, and Norway’s Equinor one.

Due to the ongoing Russia-Ukraine war, the US, the EU, Canada and other Western countries and organizations have announced and enacted numerous sanctions against Russia.

Dynagas LNG Partners said that current US and EU sanctions regimes do not materially affect its business, operations or financial condition, but the three Gazprom-chartered LNG carriers are now under control of the German government.

The charters of Amur River, Ob River and Clean Energy are “effectively under the
control of the German government for an indefinite period of time as of April 4th,” the LNG shipper said.

Gazprom Germania, the indirect parent of Gazprom Marketing and Trading, was placed under the control of the German government (Federal Network Agency) since Gazprom Germania operates critical energy infrastructure in Germany, it said.

“Period of high demand for LNG shipping”

“All six LNG carriers in our fleet are operating under their respective long-term charters with international gas producers with an average remaining contract term of 6.6 years. As of June 27, 2022, our estimated contracted revenue backlog was $0.98 billion,” chief executive Tony Lauritzen said.

He said the earliest contracted re-delivery date for any of the company’s six LNG carriers is in the third quarter of 2023 for Arctic Aurora, with the second earliest contracted re-delivery date in the first quarter of 2026 for Clean Energy, both subject to the terms of the applicable charter.

“We are in a period of high demand for LNG shipping, which we believe will benefit the partnership,” Lauritzen said.

“We continue our strategy of using our cash flow generation to deleverage our balance sheet and reinforce our liquidity so as to build equity value. This, we believe, will enhance our ability to pursue future growth initiatives,” he added.

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