Gaslog’s spot market exposure to increase in 2020

Bermuda-based LNG shipowner Gaslog Partners has seven vessels rolling off term charters this year that will operate on the spot market unless the firm can secure new charterers.

If the firm cannot secure term charters for the vessels, Gaslog's spot charter exposure could rise from the six vessels already in its spot carrier fleet to 13 vessels.

The first vessel, the 145,000m³ Methane Alison Victoria, has already finished its term charter and is now operating on the spot market.

And all but one of the seven vessels are older steam turbine vessels, with one tri-fuel diesel-electric (TFDE) carrier. Advances in propulsion technology mean that Gaslog may be unable to secure charters for the steam turbine vessels at "attractive rates" and could lower utilisation, the firm said.

But current charterers of some of the vessels do have options to extend their charters, which could curb the increase in Gaslog's vessels operating on the spot market. But these firms may seek to instead sign term charters with newer TFDE or two-stroke vessels, which typically have lower fuel consumption and boil off rates, and greater storage capacity.

The global LNG shipping market coalesced around the TFDE design in 2013, but has moved to the two-stroke model in recent years, with most of the global orderbook made up of such vessels with a storage capacity of about 174,000m³.

Gaslog's fleet, including subsidiary Gaslog LNG, is composed of 28 carriers, with seven newbuilds ordered. All of the firm's newbuilds are scheduled to be delivered in 2020-21 and are two-stroke vessels with a 174,000-180,000m³ capacity. The seven vessels are tied to long-term charters with US operator Cheniere, UK utility Centrica and Japanese firm Jera.

By Samuel Good

source: Argus Media