LNG

Belgian shipping company Exmar, owner of the “Tango FLNG” barge last deployed in Argentina, said it was actively pursuing various employment opportunities and had also had a settlement in the dispute with commodities firm Gunvor over a newbuild regasification vessel.

Belgian shipping company Exmar, owner of the “Tango FLNG” barge from Argentina now up for re-charter, reported increased third-quarter consolidated earnings.

Exmar, based in the port of Antwerp, said its operating result came to $22 million in the three months to September compared with $21M in the same quarter of 2019.

The company’s gross quarterly earnings jumped to $58.8M from $27.4M in the prior-year quarter.

Exmar is led by Chief Executive Nicolas Saverys and also continues to manage 10 LNG floating storage and regasification units, though is not directly involved in regasification projects with former partner Excelerate Energy of the US.

The company said that its Midsize Gas Carriers business continued on its upward trend while pressurized-ships spot market was suffering due to low refinery activity.

Exmar announced in October that it had reached a settlement deal with Argentine oil and gas company YPF SA over the dispute under the “Tango FLNG” charter agreement that blew up in June 2020. The LNG production barge was now available for re-hire.

Under the accord, YPF has agreed to pay Exmar $150M in consideration of the early termination of their charter agreement and the withdrawal of arbitration proceedings.

The Belgian company's FLNG barge has production capacity of around 500,000 tonnes per annum. It was first deployed at the Bahia Blanca port in Argentina.

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

The FLNG vessel, bullt at the Chinese Wison shipyard in Nantong, China, 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.

In its latest earnings, Exmar added that its infrastructure division posted an operating result of $4.1 compared with $700,000 in the same three months of last year.

The earnings had been “negatively affected” by the recognition of a provision of $16.4M on uncollected revenues from YPF for the “ Tango FLNG” barge.

However, the settlement deal will be reflected in fourth-quarter earnings for October to be published in 2021.

The loan agreement with Bank of China and Deutsche Bank with respect to the “Tango FLNG” financing foresees a replenishment of the Debt Service Reserve Account for an amount up to $40M, of which $22M has already been paid.

“The modalities for the payment of the balance are still under discussions,” added Exmar.

The company said that the FLNG barge was now being prepared for demobilization. “Commercial leads for new employment are actively being pursued,” stated Exmar.

A second Exmar vessel, a floating storage and regasfication unit, continues serving under a charter party with global commodities firm Gunvor, even though it is not yet deployed.

“Arbitration with respect to a dispute under the contract is ongoing without financial impact,” Exmar explained.

Exmar, the Belgian shipping company with more than 40 vessels in its fleet now mostly focused on the liquefied petroleum gas business, said the outbreak of the coronavirus in China has caused further delays in the release by the Bank of China of $40 million under the “Tango FLNG” loan facility. 

Exmar, which has undergone financial troubles over the past couple of years, had previously said the China Export Credit Insurance Corp. had approved the release of around $40 million from a debt service reserve account under the “Tango FLNG” loan conditions.

The “Tango FLNG” vessel is chartered to Argentina and has exported three cargoes from the port of Bahia Blanca where it produces LNG from pipeline feed-gas.

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.

Exmar said it was awaiting for the offices of the Chinese authorities to officially re-open and the tranche of money to be paid.

The vessel, chartered by Argentine energy company YPF, formally started its operations in June 2019 and the 10-year charter term began in September 2019.

The “Tango FLNG” production barge can produce around 500,000 tonnes per annum of LNG for domestic sale or export.

Exmar continues to manage 10 LNG floating storage and regasification units, though is not directly involved in regasification projects with former partner Excelerate Energy of the US.

Exmar added in its financial update that under the ongoing arbitration procedure on an FSRU barge with commodities group Gunvor, the financing of the asset could not be completed.

“Meanwhile Exmar obtained a further extension of its bridge loans until the end of February and of certain other capital expenditure until mid-March,” explained the Antwerp-based company.

Exmar is still caught up in a legal dispute with Gunvor over an FSRU barge that was also delivered from the Wison Nantong shipyard in China in 2017.

The Exmar barge with 25,000 cubic metres capacity was the subject of a 10-year Charter to Gunvor signed in October 2018.

Gunvor had been expecting to deploy the barge in Bangladesh. Then the Asian nation cancelled planned small-scale projects to concentrate on a larger venture.

Exmar has also made executive changes in January 2020 as it tries to improve finances after several setbacks to meet the challenges of the year ahead.

Among the changes, it has named Francis Mottrie in the new position of Deputy Chief Executive to work along Nicolas Saverys, the Group CEO.