LNG

Teekay LNG Partners, whose gas group units own, charter or have stakes in 77 vessels, including 47 liquefied natural gas carriers and 30 liquefied petroleum gas or multi-gas vessels, reported a first-quarter net profit following a loss in the year-ago period as voyage revenues also jumped.

First-quarter net income attributable to partners and preferred unit holders swung to a profit of $87.59 million from a loss of $32.90M in the prior-year period.

Voyage revenues increased 9 percent in the first quarter to $152.80M versus the $139.88M in the in the same three months of 2020.

“Results were positively impacted by operational claims under the Partnership’s charter contracts, lower repairs and maintenance expenses and lower net interest expense during the first quarter of 2021,” said the company.

“These increases were partially offset by redeployment of certain LNG carriers at lower rates and unscheduled off-hire for repairs,” added Teekay.

Teekay said it secured three LNG charters during March and April 2021, increasing the Partnership's LNG fleet to 98 percent fixed for the remainder of 2021, and 89 percent fixed for 2022.

In its chartering activities, the Partnership in April 2021 secured a fixed-rate charter contract for the “Oak Spirit” LNG carrier, which is expected to commence in August or September 2021, for a period of one-year.

In March 2021, a one-year, spot market-linked charter contract, with a one-year, fixed-rate option was arranged for the “Creole Spirit” LNG vessel.

Both of the vessels are modern, next generation, large LNG carriers with two-stroke engines with M-Type Electronically Controlled Gas Injection (MEGI).

As regards the dual-fuel, diesel-electric powered carrier, “Arwa Spirit”, which is 52 percent-owned by Teekay, the company said the charterer had exercised its one-year option to extend the contract to May 2022 at a fixed-rate.

“The strength of our fixed-rate LNG contract portfolio was evident again this quarter as Teekay LNG continued to generate strong earnings and cash flows even as the broader spot LNG shipping market declined from the high levels experienced during the recent winter period,” said Mark Kremin, President and Chief Executive of Teekay Gas Group Ltd.

“This decline was short-lived, however, as LNG demand rebounded counter-seasonally in late-March and into the second quarter of 2021,” added Kremin.

“We were able to take advantage of this strength by chartering out three LNG vessels, including one on a 12-month spot market-linked contract that allows us to achieve full utilization of the vessel while also retaining upside to strong markets,” stated the CEO.

Novatek, the Russian natural gas company and operator of the Yamal LNG export plant in northern Siberia, reported that its own share of cargo sales on international markets had dropped my more than 25 percent in 2020.

The company said third-quarter natural gas sales volumes, including volumes of LNG sold, amounted to an aggregated 16.56 billion cubic metres, representing a decrease of 0.8 percent compared with the prior year.

Novatek’s quarterly LNG volumes sold on international markets dropped 27.6 percent and amounted to the equivalent of 2.20 Bcm (1.63 million tonnes) versus 3.04 Bcm in the 2019 quarter.

Novatek is the largest independent natural gas producer in Russia and in December 2017 entered the global LNG market by starting up the Yamal LNG project.

Novatek’s Yamal plant has three liquefaction Trains on stream, each with nameplate capacity of 5.5 million tonnes per annum.

A smaller fourth Train at Yamal is currently being completed and will produce 900,000 tonnes per annum, taking overall production to 17.4 MTPA.

French energy company Total and China National Petroleum Corp. are the other main shareholders in the Yamal plant. Total additionally owns a 19.4 percent stake in the Novatek company.

Novatek’s upstream activities are concentrated mainly in the prolific Yamal-Nenets Autonomous Region, which is the world’s largest natural gas producing area and accounts for about 80 percent of Russian natural gas output.

The company added that nine-month LNG sales dropped 29.6 percent to 7.12 Bcm compared with 10.11 Bcm in the same 2019 period.

Natural gas volumes sold in the Russian Federation in the third quarter rose 5.1 percent and totaled 14.36 Bcm versus 13.66 Bcm in the same three months of 2019.

Russian Federation pipelines sales in the first nine months of the year were down 1.1 percent to 47.03 Bcm.

“As of the end of September, Novatek had 1.5 Bcm of natural gas, including LNG, and 743,000 tons of stable gas condensate and petroleum products in storage or transit and recognized as inventory,” said the company.

“The decrease attributable to volumes sold on international markets was mainly due to the decrease of Yamal LNG shareholders’ share, including Novatek’s share, of LNG volumes sold on the spot market, and a corresponding increase in Yamal LNG direct sales under long-term contracts,” explained Novatek.