Shipowner: 2021 will be an “exciting year” for LNG carriers

Flex LNG, the LNG shipping company owned by Norwegian shipping king Frederiksen, said that if cargo cancellations are controlled, the potential for increased LNG exports may offset the expected surge in LNG newbuilding deliveries next year. 2021 will be an “exciting year” for LNG carriers.

Flex LNG CEO Oystein Kalleklev cited U.S. Energy Information Administration (EIA) data in a recent third-quarter results conference call that U.S. LNG production may increase by 16 million tons next year.

For shipping, the reduction in canceled U.S. LNG orders is "critical" because when these cargoes are pulled to Asia, they often mean longer distances, he said. Kalleklev said that about 180 U.S. LNG shipments have been canceled this year.

Kalleklev said, "2021 will be an exciting year for LNG shipping," and while about 50 new ships are expected to be delivered next year, the additional LNG will likely offset next year's expected growth. Surge in LNG newbuilding deliveries.

Flex expects LNG to grow by about 26 million tonnes in 2021, taking into account new liquefaction and restarted liquefaction projects next year, he said.

Kalleklev said the key factors driving spot freight rates will be winter weather and the shape of the economic recovery.

The signal from the futures market is that natural gas prices will remain strong in the first quarter of 2021, which means there should be no economic incentive for the large number of freight order cancellations this year, he said.

“Given the high (Liquefied Natural Gas) inventory levels and the sizeable order book for ships to be delivered next year, we don’t think 2021 will be a cakewalk. But we are confident where we are now It’s also very good,” he said, emphasizing that the company’s fleet is very modern.

Kalleklev said that the company expects total time charter rates in 2020 to be US$60,000 per day, which is much higher than the company’s per day rate. A daily cash breakeven point of $47,000. He also said that Flex has booked about two-thirds of its available trading days in the first quarter of 2021. But he added that this period is now. It’s too early for TCE to give guidance

Flex, led by John Fredriksen, will complete the last three of its 13 LNG newships in May 2021. Delivery.

Kalleklev said that the company originally planned to take delivery of its 11th new ship, the 173,400 cubic meter Flex Freedom, at the end of this month, but has now postponed the handover date to early January. The CEO also said that the company is now "actively marketing" the Flex Freedom to potential customers. He said that the 174,000 cubic meter coal bed methane Flex Volunteer has completed sea trials and gas trials and is also available. It was put into service at the same time, but is currently planned to be handed over in February. Kalleklev said that the delivery of the 174,000 cubic meter Flex vigilance ship at the end of May will mean the completion of the company’s new shipbuilding plan.

Flex currently has 6 ships chartered out and the remaining 4 ships are operating in the spot market.

Talk about the crew change problem during the epidemic, Kalleklev called the crew stranded a "humanitarian crisis." ". He said the company had introduced plans for controlled isolation, testing, outbreak management, and held regular video conferences with senior officials on the ship.

The CEO said the company had achieved "impressive results." "Impressive results", between May and October, 93% of employees left their jobs on time according to their contracts. He said that of the 7% of overdue contracts, 20% of the overdue contracts were less than 30 days, and the rest were less than 60 days

Flex has implemented two remote ship inspection reporting programs, or SIRE, to keep certificates up to date as pandemic-related travel restrictions have made these difficult to achieve remotely, Kalleklev said. The two ships underwent two class surveys and management changes.