LNG

Belgian shipping company Exmar, owner of the “Tango FLNG” barge last deployed in Argentina and now up for re-charter, reported annual gross cash flow from operations of US$239.9 million, including a $150M settlement fee paid by Argentine energy company YPF for the “Tango FLNG” charter cancellation.

Exmar said it was getting its finances back on track after payments from YPS and financing deals for other parts of its fleet.

Exmar, based in the port of Antwerp, said it still posted a loss of $7.8M for its operating result versus a profit of $14.5M in 2019.

“Earnings were negatively impacted by an impairment of $28.5M on older vessels,” explained Exmar.

“The year 2020 will be remembered as being dominated by the unprecedented pandemic which distorted economic activities worldwide and made big impacts on daily lives. The reality is that overall, seaborne gas markets fared relatively well,” stated Exmar.

Exmar’s FLNG vessel, built at the Chinese Wison shipyard in Nantong, China, formally started its operations at Bahia Blanca port in Argentina in mid-2019 and a 10-year charter term began in September 2019.

The Belgian company's FLNG barge has production capacity of around 500,000 tonnes per annum. 

“Since the effective termination of the contract with YPF in October 2020, marketing is in full swing and, given its status as a fully-proven facility, there is a healthy interest from the market for a ‘Tango FLNG’ redeployment,” said Exmar.

“The fact that the start of 2021 saw increased price levels of oil and gas globally will certainly benefit the opportunities for reactivation,” it stated.

The company added that the Exmar LNG carrier “Excalibur” was under a time-charter contract until early 2022.

Exmar also noted some highlights at the end of 2020 and the start of 2021, including the $40M replenishment a debt agreement with Bank of China and the refinancing of a bank facility with Nordea bank of Finland for Exmar’s liquefied petroleum gas (LPG) midsize fleet for an amount of $310M, of which $290M has been drawn.

Additionally, Exmar said that at the start of the first quarter of 2021 it signed lease financing for two Very Large Gas Carriers (VLGCs) under construction.

Exmar said its average time-charter equivalent rates for the midsize (38,115 cubic metres capacity) LPG fleet rose to $21,680 per day from $18,587 per day in 2019.

For VLGCs (83,300 cbm) it was $30,605 per day, up from $28,527 per day in the previous year.

Pressurized vessel (5,000 cbm) rates came to $7,865 versus $8,861 in 2019.

“Exmar will take delivery of two LPG-fuelled 88,000 cbm VLGC newbuildings, to be named ‘Flanders Innovation’ and ‘Flanders Pioneer’, in the second and third quarter of 2021 that will enter into a long-term time-charter to Equinor ASA (Norway),” said the company.

“These vessels were the first VLGCs ordered at the time with dual-fuel engines able to burn LPG on the main engine, substantially reducing emissions and underlining Exmar’s continued and consistent ability to innovate,” added Exmar.

Exmar, the Belgian shipping line, has reached a settlement agreement with Argentine oil and gas company YPF SA over the dispute under the “Tango FLNG” charter agreements that blew up in June 2020 and the production barge is now available for hire.

The Belgian company said a settlement amount of US$150 million will be paid by YPF to Exmar in consideration of the early termination of their charter agreements and the withdrawing of arbitration proceedings.

“A first instalment of $22m was remitted on October 19. The balance of $128M is payable in 18 monthly instalments backed by adequate financial security,” said Exmar.

The loan agreement with Bank of China and Deutsche Bank with respect to the “Tango FLNG” foresees a replenishment of the Debt Service Reserve Account for an amount up to $40M.

“The specific modalities are currently being discussed with the lenders,” said Exmar.

The Belgian company stated that the FLNG barge with production capacity of around 500,000 tonnes per annum was now available for other projects.

“The FLNG’s immediate availability, proven track record and operational experience are the right elements to rapidly unlock new markets for gas exports,” said Exmar.

“Commercial leads for new employment are being actively pursued,” it added.

In addition to owning an LNG FSRU and its FLNG management interests, Exmar owns and manages a fleet of almost 40 other vessels including liquefied petroleum gas (LPG) carriers.

The “Tango FLNG” was first deployed at Bahai Blanca port in Argentina.

The vessel was built at the Chinese Wison shipyard in Nantong and delivered to Exmar in 2017. It had initially been destined for a project in Colombia in South America that was cancelled.

The vessel formally started its operations in Argentina in mid-2019 and a 10-year charter term began in September 2019.

Exmar said the “Tango FLNG” had delivered five shipments, or 624,000 cubic metres of LNG to date with an availability of 99 percent.

The winter season then started in the Southern Hemisphere and liquefaction activities were stopped by YPF in May 2020.

Exmar first announced a YPF “force majeure” for the vessel on June 25, 2020.

YPF used pipeline natural gas to produce the LNG and export it, as a possible prelude to being a future LNG exporter from its huge onshore Vaca Meurta shale gas resources. 

Exmar is led by Chief Executive Nicolas Saverys and has suffered some financial difficulties for several years. However, it continues to manage 10 LNG FSRUs for former partner Excelerate Energy of the US, with whom it started many LNG import projects.