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.

Argentine oil and gas producer, Yacimientos Petroleiferos Fiscales (YPF), has sold overseas bonds for the first time in more than a year amid a slow return of investor confidence as the company starts small-scale LNG exports and the nation’s huge Vaca Muerta shale basin continues to be developed.

YPF issued $500 million of 10-year, dollar-denominated notes to yield 8.75 percent. The sale on June 24 was managed by the US Citigroup, the UK’s HSBC Holdings and Itau Unibanco Holdings SA of Brazil.

Bankers said that proceeds from the sale would go towards working capital and refinancing existing debt.

State-owned YPF is traditionally among the country’s biggest corporate borrowers and it hadn’t issued bonds recently in international markets as an economic slowdown and a currency crisis affected investor confidence.

YPF is the largest investor in the Vaca Muerta shale basin of onshore oil and gas reserves in the northwest Argentine province of Neuquen.

Covering an area the size of a small European country, it has become one of the world’s leading shale basins and has attracted international companies such as US majors ExxonMobil and Chevron Corp., Qatar Petroleum, French major Total and Equinor of Norway.

Argentina also loaded its first shipment of LNG on June 3 for export at the “Tango FLNG” facility deployed at the Argentine port of Bahia Blanca.

YPF said the shipment included 30,000 cubic metres of natural gas from the Vaca Muerta shale.

An LNG carrier, the Malta-registered and Japanese-built “Fuji LNG”, lifted the cargo at Bahia Blanca after arriving on June 2 and then proceeded to Cheniere Energy’s Sabine Pass plant in Louisiana, arriving on June 24, according to shipping data.

The “Tango FLNG” plant is chartered under a 10-year agreement from Belgian shipping company Exmar.

The vessel is the former floating liquefaction unit, “Caribbean FLNG”, constructed for a cancelled venture in the South American state of Colombia and renamed before being sent to Argentina.

YPF did not at first specify the destination of the shipment, though said it was being helped by the marketing arm of US exporter Cheniere.

Argentina’s medium-term aim in the LNG sector is to halt its own LNG imports, which will number at least nine large-scale cargoes or more for the Southern Hemisphere winter, and to become an exporter.

Growing natural gas production from the Vaca Muerta shale will eventually meet all of the nation’s energy requirements and leave a surplus for export.

However, production costs for shale will have to be reduced to make exports economic and huge investment is needed in infrastructure to handle large-scale gas volumes and onshore liquefaction, though the floating LNG project is viewed as a good introduction to the export market for YPF.

The “Tango FLNG” plant will produce up to eight cargoes per annum from the Vaca Muerta supplies.

The shale-gas production has also enabled the resumption of pipeline supplies to neighbouring Chile.