LNG

Flex LNG, the Norwegian shipping company with a fleet of 13 modern vessels, said it had extended the time-charters for three ships with Cheniere Energy, owner of the Sabine Pass and Corpus Christi exporting plants on the Gulf Coast, and meaning that Cheniere now has five Flex vessels chartered.

Flex LNG, the Norwegian shipping company with a fleet of 13 modern vessels and several chartered to the largest US exporter Cheniere Energy, reported higher third-quarter revenues and profits as global demand soared for cargoes.

“The gas crunch is not going away anytime soon and arbitrage between the US and import nations in Europe and Asia will stay at elevated levels supporting freight market economics,” said Flex in presenting its earnings.

Flex explained that about 40 LNG carriers in the global fleet were tied up in floating storage due to traffic congestion and contango - when the futures price was at a higher level than the spot price as has happened throughout the third quarter.

Flex’s vessel operating revenues in the third quarter amounted to $91.3 million to the end of September 2022 compared with $81.8M in the same three months of 2021 and $84.2M for the second quarter of 2022.

Net income increased to $46.6M from $32.8M in the prior-year quarter and $44.3M in the second quarter this year.

Charter rates

The Bermuda-based company’s average time charter equivalent (TCE) rates for the three months came to $75,941 per day versus $68,341 per day a year ago and $70,707 per day for the second quarter of this year.

“During the third quarter, ‘Flex Enterprise’ and ‘Flex Amber’ commenced their new seven-year time charters agreed in June 2022,” said Øystein Kalleklev, Chief Executive of Flex LNG Management AS.

“Additionally, ‘Flex Aurora’ was delivered to Cheniere as the fifth and last ship under the agreement announced in April 2021,” he added.

“Flex LNG today has 12 LNG carriers on fixed-hire time charters and one ship, ‘Flex Artemis’, on a variable time charter,” stated Kalleklev.

The CEO noted that Flex’s first fully open ship, after charterer’s options, is in the middle of 2026 with three other ships coming open in 2027.

“With 2027 the earliest newbuilding delivery window and newbuilding prices at around $250M, we are therefore upbeat about the prospects of re-contracting our ships at attractive levels thereby adding further backlog to the company,” said Kalleklev.

Rate derivative gain

“For the first nine months of 2022, total net income was $147M, fuelled by $75M gains on interest rate derivatives, as we have been ahead of the curve locking in long-term interest rates at very attractive levels before the Federal Reserve started to hike US rates,” he explained.

Flex said it planned to optimize financing for the remaining seven ships in the fleet with the aim of increasing its cash position by a further $100M while at the same time improving overall financing terms.

“We have now secured refinancing for four of the seven ships with net proceeds of $110M. We are thus already ahead of the $100M target, and we expect the cash release to grow further as we are also making good progress on the refinancing of the remaining three ships,” said the CEO.

“Given the strong freight market, our extensive contract backlog and our super strong financial position we are therefore pleased to declare an ordinary quarterly dividend of $0.75 per share which should provide our shareholders with an attractive yield of approximately 10 percent,” added Kalleklev.

The company noted in its presentation that the fleet had been acquired at “historical attractive prices” compared to the newbuilding prices today, while book equity values reflect historical costs adjusted with regular depreciations.

Flex LNG, the Norwegian shipping company with a fleet of 13 carriers, said that Cheniere Marketing, a unit of the operator of the Sabine Pass and Corpus Christi export plants on the US Gulf Coast, has declared its option to employ a fifth LNG carrier under existing time charter agreements.

Cheniere and Flex LNG have also agreed that the 174,100 cubic metres capacity “Flex Volunteer” will be the fourth ship under the agreement and that this vessel will be delivered to Cheniere in mid-April 2022.

The delivery is ahead of the original schedule of the third quarter of 2022.

“The ‘Flex Volunteer’ charter with for a duration of 3.5 years has therefore been extended by about 2.5 months to facilitate early delivery of the ship to Cheniere,” said Flex LNG.

“The ‘Flex Aurora’ will be the fifth ship to be delivered to Cheniere, and she will commence her 3.5-year time charter during the third quarter of 2022 according to the original agreement,” added the company.

The fleet owner, which is listed on the New York Stock Exchange and the Oslo Børs in Norway and headquartered in Hamilton, Bermuda, noted that Cheniere took delivery  in 2021 of the “Flex Vigilant”, the “Flex Endeavour” and the “Flex Ranger”.

These ships were supplied under time charters with a minimum duration of between 3 and 3.8 years.

All existing Flex LNG ships are large LNG carriers with a cargo capacity of between 173,400 to 174,000 cubic metres and are fitted with efficient dual-fuel, two-stroke propulsion (ME-GI/XDF).

“This makes the ships particularly ideal for large parcel, long haul transportation with the industry's lowest carbon footprint and unit transportation cost,” said Flex LNG.

The company added that the time charter party agreements remained subject to certain closing conditions in connection with the delivery and acceptance of the LNG carriers to Cheniere.

Flex LNG, the shipping company with a fleet of 13 carriers, achieved charter equivalent rates of almost $96,000 per day in the fourth quarter to help reach record revenues and net income.

Flex LNG, the growing LNG shipping company with four vessels operating and nine others on order and whose largest shareholder is a company controlled by Norwegian magnate John Fredriksen, said it completed a sale-and-charterback transaction for two vessels.

Flex completed the transaction with Hyundai Glovis Co. of South Korea, a logistics company that normally specializes in car-shipping vessels.

The Flex deal involved the 174,000 cubic metres capacity LNG carriers “Flex Endeavour” and “Flex Enterprise”. Planning for the transaction was first disclosed in April 2019.

Under the agreement, Flex LNG sold the vessels to Hyundai Glovis for a combined gross sum of $420 million, with a net consideration of $300M adjusted for a non-interest bearing seller's credit of $120M in total.

Flex explained that both carriers were then charted back for a period of 10 years.

Flex, which is listed on the Oslo bourse in Norway and the New York Stock Exchange, will have options to acquire the vessels during the term of the time-charters.

At the end of the 10-year charter period, Flex will have the right to acquire the vessels and Hyundai Glovis will have the right to sell them back to Flex for a total consideration of $150M, net of the $120M seller's credit.

The “Flex Endeavour” and “Flex Enterprise” were, together with sister ship, the “Flex Ranger”, financed under a $315m term loan facility due in 2023.

In addition to the Hyundai Glovis deal, Flex said it also closed the refinanced the remaining payment tranche for the “Flex Ranger”, and the total outstanding of $294M under the $315M facility has been prepaid in full.

Other terms and conditions are similar to the $250M financing for the 174,000 cubic metres capacity “Flex Constellation” and “Flex Courageous” announced in February 2019.

“We are very satisfied with the successful closing of the Glovis sale-and-charterback according to plan, and highly appreciate the close and good working relationship with Hyundai Glovis throughout this process,” said Oystein Kalleklev, Chief Executive of Flex LNG Management AS.

“In connection with the Glovis SCB we also decided to improve our capital structure by refinancing ‘Flex Ranger’ at better terms and conditions,” he added.

“The two transactions improve our financial flexibility to return earnings to our shareholders when market conditions improve,” stated Kalleklev.

Flex LNG, the growing LNG shipping company with four vessels operating and nine others on order and whose largest shareholder is a company controlled by Norwegian magnate John Fredriksen, reported wider first-quarter loss, though remained confident of a market turnaround.

Flex LNG, the growing LNG shipping company with four vessels operating and nine others on order and whose largest shareholder is a trust firm controlled by Norwegian magnate John Fredriksen, has formally filed with the US Securities and Exchange Commission to be listed on the New York Stock Exchange.

April 30 (LNGJ) - Flex LNG said it signed a sale-charterback transaction with Hyundai Glovis Co. of South Korea, a logistics company that normally specializes in car-shipping vessels, for the LNG carriers “Flex Endeavour” and “Flex Enterprise”. Under the agreement, Flex LNG will sell the vessels to Hyundai Glovis for a combined gross sum of $420m, with a net consideration of $300M adjusted for a non-interest bearing seller's credit of $120M in total.

   Flex explained that both carriers would then be charted back for a period of 10 years. Flex will have options to acquire the vessels during the term of the time-charters. At the end of the 10-year charter period, Flex will have the right to acquire the vessels and Hyundai Glovis will have the right to sell them back to Flex for a total consideration of $150M, net of the $120m seller's credit.

Flex LNG, the growing LNG shipping company with four vessels operating and nine others on order and whose largest shareholder is a company controlled by Norwegian magnate John Fredriksen, posted a rise in net profits as fourth-quarter spot LNG cargo rates reached record levels then slumped in the first quarter of 2019.

Feb 4 (LNGJ) - The 173,400 cubic metres capacity carrier “Flex Endeavour” will deliver a re-loaded cargo on February 7 to the UK South Hook import terminal at Milford Haven in Wales from the French Atlantic coast Montoir-de-Bretagne terminal, according to the port authority. The shipment was heading for the UK as the National Balancing Point benchmark natural gas price was at the equivalent of $6.55 per million British thermal units, while one of the main continental European prices, the Dutch Title Transfer Facility (TTF), was lower at around $6.35 per MMBtu.