Gaslog Partners LP Expects LNG Tanker Spot Rates to Remain High Well Into 2022
GasLog Partners LP, an international owner and operator of liquefied natural gas (“LNG”) carriers, reported its financial results for the three-month period ended September 30, 2021.
Highlights
• Signed a one-year time charter agreement for the GasLog Seattle with TotalEnergies SE (“TotalEnergies”) and extended the time charter of the GasLog Santiago with Trafigura Maritime Logistics PTE Ltd. (“Trafigura”) for an additional twelve months.• Repurchased $12.4 million of Series B and Series C Preference Units in the open market.• Repaid $36.1 million of debt during the third quarter of 2021, or $90.9 million of debt in the first nine months of 2021.• Post quarter-end, completed the sale and lease-back of the GasLog Shanghai with a wholly-owned subsidiary of China Development Bank Leasing (“CDBL”), releasing $20.1 million of incremental net liquidity.• Quarterly Revenues, Profit, Adjusted Profit(1) and Adjusted EBITDA(1) of $80.5 million, $26.5 million, $24.7 million and $57.3 million, respectively.• Quarterly Earnings per unit (“EPU”) of $0.37 and Adjusted EPU(1) of $0.34.• Declared cash distribution of $0.01 per common unit for the third quarter of 2021.
Paolo Enoizi, Chief Executive Officer, commented: “I am pleased to report a strong operational and financial quarter for the Partnership. Our fleet performed with nearly 100% uptime, while our revenues and cash flows improved significantly from the second quarter.
During the third quarter, we repaid $36.1 million of debt, bringing the total amount of debt retired in the first nine months of 2021 to $90.9 million. We also repurchased approximately $12.4 million of preference units in the open market below par, reducing the fleet’s all-in cash break-even. In addition, we have 100% of available revenue days fixed in the fourth quarter of 2021 and 76% in 2022. This fixed charter coverage along with the cash flows generated thus far in 2021 more than covers all the Partnership’s operating, overhead, current debt service and other fixed obligations through at least 2022.
Our capital allocation priorities for 2022 remain focused on reducing our leverage and improving the cash break-even of our fleet. This may include accelerated debt repayment or further opportunistic repurchases of our preference units in the open market, subject to market conditions. Lower debt levels and cash break-even rates will position the Partnership for continued success in the spot and short-term market for LNG shipping.”
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Strong LNG Sport Market Provides Boost to GasLog Partners’ First Quarter Results
GasLog Partners LP, an international owner and operator of liquefied natural gas (“LNG”) carriers, reported its financial results for the three-month period ended March 31, 2021.
Highlights
Repaid $36.0 million of debt during the first quarter of 2021.
Quarterly Revenues, Profit, Adjusted Profit(1) and Adjusted EBITDA(1) of $87.1 million, $35.4 million, $31.8 million and $64.1 million, respectively.
Quarterly Earnings per unit (“EPU”) of $0.57 and Adjusted EPU(1) of $0.50.
Declared cash distribution of $0.01 per common unit for the first quarter of 2021.
CEO Statement
Paul Wogan, Chief Executive Officer, commented: “I am pleased to report another strong operational quarter for the Partnership with fleet uptime of 100%. A robust spot market for LNG carriers during the 2020/21 Northern Hemisphere winter, combined with our focus on cost reductions and lower interest expense bolstered the Partnership’s financial results in the first quarter of 2021, largely offsetting the impact from the expiration of three initial multi-year steam turbine propulsion (“Steam”) vessel charters.
During the first quarter, we improved our charter coverage to 75% for the remainder of 2021. This fixed charter coverage, along with the Adjusted EBITDA delivered in the first quarter, more than covers all the Partnership’s operating, overhead and debt service requirements as well as expenses related to our five dry-dockings scheduled for this year.
Although the Partnership has covered its fixed expenses for the year, we still retain a meaningful exposure to any recovery in LNG shipping spot rates during the second half of 2021. We anticipate that our capital allocation in 2021 will continue to focus on debt repayment with repayments of $36.0 million in the quarter, we continue to reduce the fleet’s breakeven levels and improve its free cash flow capacity over time.”
There were 1,311 revenue operating days for the three months ended March 31, 2021, as compared to 1,273 revenue operating days for the three months ended March 31, 2020. The year-over-year increase in revenue operating days is attributable to the increased utilization of our spot fleet, as defined below, and decreased off-hire days for scheduled dry-dockings.
Management classifies the Partnership’s vessels from a commercial point of view into two categories: (a) spot fleet and (b) long-term fleet. The spot fleet includes all vessels under charter party agreements with an initial duration of less than (or equal to) five years (excluding optional periods), while the long-term fleet comprises all vessels with charter party agreements of an initial duration of more than five years (excluding optional periods).
Revenues decreased by $4.3 million, from $91.4 million for the quarter ended March 31, 2020, to $87.1 million for the same period in 2021. The decrease in revenues is mainly attributable to the expirations of the initial multi-year time charters of the Methane Rita Andrea and the Methane Shirley Elisabeth with a subsidiary of Royal Dutch Shell (“Shell”) in 2020, at rates higher than their current contracted rates, partially offset by increased revenues from the operation of the Methane Heather Sally in the spot market after the expiration of its initial multi-year charter with Shell in January 2021, and a net increase in revenues due to decreased off-hire days for scheduled dry-dockings.
Vessel operating costs decreased by $1.3 million, from $19.1 million for the quarter ended March 31, 2020, to $17.8 million for the same period in 2021. The decrease in vessel operating costs is mainly attributable to increased technical maintenance expenses incurred in the first three months of 2020 in connection with the dry-docking of the Methane Shirley Elisabeth completed in the same period. As a result, daily operating costs per vessel (after excluding calendar days for the Solaris, the operating costs of which are covered by the charterers) decreased from $14,987 per day for the three-month period ended March 31, 2020 to $14,132 per day for the three-month period ended March 31, 2021.
Voyage expenses and commissions decreased by $1.8 million, from $3.9 million for the quarter ended March 31, 2020, to $2.1 million for the quarter ended March 31, 2021. The decrease in voyage expenses and commissions is mainly attributable to a decrease in bunker consumption costs due to the increased utilization of the Methane Alison Victoria in the first three months of 2021, as compared to the same period in 2020.
General and administrative expenses decreased by $1.1 million, from $4.2 million for the three-month period ended March 31, 2020, to $3.1 million for the same period in 2021. The decrease in general and administrative expenses is mainly attributable to a decrease of $0.8 million in administrative services fees, in connection with the decrease of the annual fee payable to GasLog in 2021 by approximately $0.2 million per vessel per year. As a result, daily general and administrative expenses decreased from $3,056 per vessel ownership day for the quarter ended March 31, 2020, to $2,275 per vessel ownership day for the quarter ended March 31, 2021.
The decrease in Adjusted EBITDA of $0.1 million, from $64.2 million in the first quarter of 2020 as compared to $64.1 million in the same period in 2021, is attributable to the decrease in revenues of $4.3 million, as described above, which was almost entirely offset by an aggregate increase of $4.2 million from savings in operating, voyage and general and administrative expenses.
Financial costs decreased by $6.1 million, from $15.5 million for the quarter ended March 31, 2020, to $9.4 million for the same period in 2021. The decrease in financial costs is attributable to a decrease of $5.6 million in interest expense on loans, primarily due to the lower London Interbank Offered Rate (“LIBOR”) rates in the first three months of 2021 as compared to the same period in 2020. During the three-month period ended March 31, 2020, we had an average of $1,352.2 million of outstanding indebtedness with a weighted average interest rate of 3.9%, compared to an average of $1,287.8 million of outstanding indebtedness with a weighted average interest rate of 2.4% during the three-month period ended March 31, 2021.
Loss on derivatives decreased by $15.4 million, from a loss of $14.1 million for the quarter ended March 31, 2020, to a gain of $1.3 million for the same period in 2021. The decrease is attributable to a $17.3 million decrease in unrealized loss from the mark-to-market valuation of derivatives held for trading (in 2021, interest rate swaps only) which were carried at fair value through profit or loss, partially offset by a net increase of $1.9 million in realized loss on derivatives held for trading.
The increase in profit of $21.2 million from $14.2 million in the first quarter of 2020 to $35.4 million in the first quarter of 2021 is mainly attributable to the decrease of $6.1 million in financial costs and the decrease of $15.4 million in loss/(gain) on derivatives analyzed above.
The increase in Adjusted Profit of $4.0 million, from $27.8 million in the first quarter of 2020 to $31.8 million in the first quarter of 2021, is mainly attributable to the decrease in interest expense on loans of $5.6 million, partially offset by a net increase in realized loss on derivatives held for trading of $1.9 million, also discussed above.
As of March 31, 2021, we had $95.1 million of cash and cash equivalents, out of which $43.2 million was held in current accounts and $51.9 million was held in time deposits with an original duration of less than three months.
As of March 31, 2021, we had an aggregate of $1,250.8 million of borrowings outstanding under our credit facilities, of which $105.0 million was repayable within one year. In addition, as of March 31, 2021, we had unused availability under our revolving credit facility with GasLog of $30.0 million, which matures in March 2022.
As of March 31, 2021, our current assets totaled $118.2 million and current liabilities totaled $170.2 million, resulting in a negative working capital position of $52.0 million. Current liabilities include $19.8 million of unearned revenue in relation to hires received in advance (which represents a non-cash liability that will be recognized as revenues after March 31, 2021 as the services are rendered). Management monitors the Partnership’s liquidity position throughout the year to ensure that it has access to sufficient funds to meet its forecast cash requirements, including debt service commitments, and to monitor compliance with the financial covenants within its loan facilities. Considering the volatile commercial and financial market conditions experienced over the last twelve months, we anticipate that our primary sources of funds for at least twelve months from the date of this report will be available cash, cash from operations and existing debt facilities. We believe that these anticipated sources of funds, as well as our decision in 2020 to decrease the common unit distributions and preserve liquidity, will be sufficient to meet our liquidity needs and to comply with our banking covenants for at least twelve months from the date of this report. Our long-term ability to repay our debts and maintain compliance with our debt covenants for at least twelve months from the date of this report without reliance on additional sources of finance is also dependent on a sustainable longer-term recovery in the LNG charter market from the market disruption observed in 2020 as a result of the COVID-19 outbreak.
GasLog Partners LP Reports Financial Results for the Three-Month Period and the Year Ended December 31, 2020
asLog Partners LP, an international owner and operator of liquefied natural gas (“LNG”) carriers, reported its financial results for the three-month period and the year ended December 31, 2020.
Highlights
• Following the completion of the Partnership’s strategic review, GasLog Partners will maintain its current corporate structure and will continue to pursue its own independent strategy of owning, operating and acquiring LNG carriers.• During the quarter, signed a new two-year time charter for the 15-year old steam turbine propulsion (“Steam”) vessel, Methane Jane Elizabeth, with a wholly owned subsidiary of Cheniere Energy Inc. (“Cheniere”).• Repaid $18.8 million of debt in the fourth quarter of 2020, bringing total debt repayment (excluding prepayments for refinanced facilities) to $107.3 million during 2020.• Quarterly Revenues, Profit, Adjusted Profit(1) and Adjusted EBITDA(1) of $85.0 million, $22.6 million, $25.9 million and $59.0 million, respectively.• Annual Revenues, Profit, Adjusted Profit(1) and Adjusted EBITDA(1) of $333.7 million, $56.9 million, $92.4 million and $230.6 million, respectively.• Quarterly Earnings per unit of $0.31 and Adjusted Earnings per unit(1) of $0.38.• Annual Earnings per unit of $0.55 and Adjusted Earnings per unit(1) of $1.29.• Cash distribution of $0.01 per common unit for the fourth quarter of 2020, unchanged from the third quarter of 2020.Chairman and CEO Statements
Curt Anastasio, Chairman of GasLog Partners stated: “The spot and short-term trading market for LNG carriers has experienced significant growth in recent years and we expect this to continue as the LNG commodity itself becomes increasingly traded on a spot and short-term basis. With a leading operating and commercial platform backing us through our parent, GasLog Ltd., as well as a diverse asset base, the Partnership is positioned to succeed in this market.
While the independent strategic review announced last November has concluded, strategy remains an ongoing focus of the board. We are open to entertaining all value-enhancing options for the business as we continue to reduce debt and enhance liquidity.”
Paul Wogan, Chief Executive Officer, commented: “The fourth quarter was another operational and commercial success for the Partnership with fleet uptime of approximately 100%. I am pleased to say that we were able to execute on our strategic priorities of maximizing fleet utilization and reducing our leverage during 2020, despite the headwinds brought on by the COVID-19 pandemic, and I look forward to further progression in 2021.
During the quarter, we repaid $18.8 million of debt, bringing the total debt amortization for 2020 to $107.3 million. In addition, we entered a two-year time charter with Cheniere for the Methane Jane Elizabeth, increasing our charter coverage for 2021 and 2022 to 77% and 57% of available days, respectively. Although we have taken material steps to balance our market exposure in 2021, we expect our capital allocation strategy to continue to focus on reducing our leverage during 2021.
We expect that our focus on debt reduction will reduce the cash break-even rates of our fleet overtime, increasing our competitiveness and free cash flow capacity.”
Strategic Review Update
On November 10, 2020, the Partnership announced its intention to engage with an independent advisor to assess its strategic alternatives. After a comprehensive analysis conducted by management, in conjunction with Stifel, Nicolaus & Company, Inc. acting as a financial advisor, of the Partnership’s corporate structure, assets, financial position, competitive environment and current and expected commercial market, the following conclusions have been reached:
• The Partnership will maintain its current corporate structure with GasLog Ltd. (“GasLog”, the “General Partner” or “GP”) as its general partner;• The Partnership will continue to pursue an independent commercial and operational strategy of owning, operating and acquiring LNG carriers; and• Strategy remains an ongoing focus of the board of directors and we are open to entertaining all value-enhancing options for the business as we continue to reduce debt and enhance liquidity.
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GasLog Partners LP Announces Appointment of Director
GasLog Partners LP announced yesterday that it has appointed Roland Fisher as Independent Director to the Partnership’s Board of Directors (the “Board”), effective immediately.
Roland Fisher is the founder of Gasfin Development, a company recognized for pioneering mid-scale LNG infrastructure in multiple markets. Gasfin is a partner in the Tema LNG Terminal in Ghana, Sub-Sahara Africa’s first LNG terminal, and developed the unique LNG regasification barge and floating storage unit being employed there.
Prior to founding Gasfin, Mr. Fisher was Chief Financial Officer at TGE Group, a specialist cryogenic gas engineering business. Previously, Mr. Fisher also spent 10 years in private equity investment roles with Caledonia Investments and Actis working on a diverse portfolio from natural resources to financial services across Europe, Southern Africa and South America. He started his career with Deloitte in London.
Mr. Fisher is a Chartered Accountant (ICAEW), holds an MBA with Distinction from INSEAD, and an MA (Hons) from Edinburgh University. He sits on the investment committee of Nash & Co and is a Trustee of Kasanka National Park in Zambia.
Curt Anastasio, Chairman of the Board of Directors of GasLog Partners stated, “On behalf of the directors and management, I am pleased to welcome Roly to the Partnership’s Board. His expertise in LNG infrastructure as well as capital markets will be a welcome addition to the Board and I look forward to working together during this exciting and transitional period for our business.”
GasLog Partners LP Reports Financial Results for the Three-Month Period Ended September 30, 2020 and Declares Cash Distribution
GasLog Partners LP, an international owner and operator of liquefied natural gas (“LNG”) carriers, today reported its financial results for the three-month period ended September 30, 2020.
Highlights
Refinanced all debt due to mature in 2021 with two new credit facilities representing a total of $454.0 million, strengthening the balance sheet and delivering $14.9 million of incremental liquidity.
Signed a new three-year time charter for the steam turbine propulsion (“Steam”) vessel Methane Alison Victoria with CNTIC VPower Energy Ltd. (“CNTIC VPower”), an independent Chinese energy company. The vessel will primarily service the transportation, storage and breakbulk of LNG in Myanmar.
Signed a new multi-month time charter for the Steam vessel Methane Jane Elizabeth with a major LNG charterer.
Repaid approximately $33.0 million of debt, bringing total debt repayment (excluding prepayments for refinanced facilities) to approximately $88.0 million through the first nine months of 2020.
Quarterly Revenues, Profit, Adjusted Profit(1) and Adjusted EBITDA(1) of $72.8 million, $11.9 million, $12.8 million and $46.8 million, respectively.
Quarterly Earnings per unit (“EPU”) of $0.09 and Adjusted EPU(1) of $0.11.
Declared cash distribution of $0.01 per common unit for the third quarter of 2020.
The Partnership’s board of directors and management intend to engage with an independent advisor to review together the Partnership’s business and assess its strategic alternatives.
Chairman and CEO Statements
Curt Anastasio, Chairman of GasLog Partners, stated: “The Partnership was created primarily to fund the growth of our parent, GasLog Ltd. (“GasLog”), for which we have undoubtedly been successful, but which also relied on external capital to execute. The last several years have been challenging for capital markets for midstream energy, which along with declining visibility into the Partnership’s future financial performance, exacerbated by the COVID-19 pandemic, have resulted in a significantly higher cost of capital.
In response to these challenges, the board of directors and management have been proactive in refinancing our debt maturities, reducing our cost base, increasing the utilization of our fleet and optimizing our corporate structure. As we look out to 2021, we continue to see uncertainty in the commercial market of our assets. Rather than rely on the continuation of improved market conditions, we believe it prudent to further de-risk the Partnership and prioritize preserving liquidity and deleveraging the balance sheet.
Further to this end, the board of directors have concluded that it is in the best interest of all stakeholders to conduct an independent review of the Partnership’s business and strategic alternatives, which we anticipate to complete not later than the first quarter of 2021.”
Paul Wogan, Chief Executive Officer, commented: “I am pleased to report another positive operational quarter for the Partnership, delivered despite the ongoing challenges presented by the COVID-19 pandemic.
During the quarter, we refinanced all our debt maturing in 2021 meaning we have no debt refinancing until 2024. Excluding prepayments for refinanced facilities, we repaid approximately $33.0 million of debt, bringing the total debt amortization for the first nine months of this year to $88.0 million. In addition, the recent three-year charter for the Methane Alison Victoria, the multi-month charter on the Methane Jane Elizabeth and the two-year charter on the Methane Shirley Elisabeth, entered into in July 2020, increases our charter coverage for 2021 to 71% of available days.
While these are positive developments, our cost of capital remains elevated and there continues to be a high degree of COVID-19-related uncertainty in the near-term LNG and LNG shipping markets. By the end of 2020, all five of the Partnership’s Steam vessels will have ended their initial multi-year time charters with subsidiaries of Royal Dutch Shell plc (“Shell”), while three additional tri-fuel diesel electric vessel (“TFDE”) vessels will conclude their multi-year charters next year. Although we have been successful in finding longer-term employment for some of our available vessels, this has been concluded at current market rates which are below those achieved during the initial charters.
Given these factors, combined with the Partnership’s capital allocation strategy, which is focused on deleveraging, we made the difficult decision to decrease the common unit distribution to $0.01 per common unit beginning with the third quarter of 2020. As a result, the Partnership will retain approximately $22 million dollars annually, allowing it to preserve liquidity during this period of COVID-19-related uncertainty. We believe this action will further strengthen the Partnership’s balance sheet, lower the fleet’s breakeven, reduce its cost of capital and further enhance its competitive positioning.”
There were 1,247 revenue operating days for the quarter ended September 30, 2020 compared to 1,365 revenue operating days for the quarter ended September 30, 2019, mainly due to the increased off-hire days for scheduled dry-dockings.
The decrease of $17.5 million in profit in the third quarter of 2020 as compared to the same period in 2019 is mainly attributable to a decrease in revenues of $23.7 million, primarily due to the expirations of the initial multi-year time charters of the Methane Jane Elizabeth, the Methane Alison Victoria, the Methane Rita Andrea and the Methane Shirley Elisabeth and the 18-month time charter of the GasLog Sydney and also due to increased off-hire days due to dry-dockings. Following the expirations of their initial charters, the Methane Jane Elizabeth was re-chartered to Trafigura Maritime Logistics PTE Ltd. (“Trafigura”) in November 2019, the Methane Alison Victoria to a wholly owned subsidiary of JOVO Group (“JOVO”) in June 2020 and the Methane Shirley Elisabeth to CNTIC VPower in September 2020, while the Methane Rita Andrea and the GasLog Sydney have been trading in the spot market since May 2020 and June 2020, respectively.
The decrease in Adjusted EBITDA of $25.0 million in the third quarter of 2020 as compared to the same period in 2019 is mainly attributable to the decrease in revenues of $23.7 million described above and an increase of $1.2 million in operating expenses due to the scheduled dry-dockings of three of our vessels in the third quarter of 2020.
The decrease in revenues was partially offset by a $6.7 million decrease in interest expense due to the lower London Interbank Offered Rate (“LIBOR”) rates prevailing in the third quarter of 2020 compared to the same period in 2019.
As of September 30, 2020, we had $79.0 million of cash and cash equivalents. In September 2020, an amount of $9.2 million of cash collateral was released, pursuant to an amendment to the Credit Support Annex entered into between GasLog Partners and GasLog in March 2020. As of September 30, 2020, an aggregate amount of $7.6 million was held as cash collateral with respect to our derivative instruments with GasLog ($5.8 million) and bank counterparties ($1.8 million).
As of September 30, 2020, we had an aggregate of $1,303.6 million of borrowings outstanding under our credit facilities, of which $104.9 million was repayable within one year. In addition, as of September 30, 2020, we had unused availability under our revolving credit facility with GasLog of $30.0 million.
As of September 30, 2020, our current assets totaled $106.8 million and current liabilities totaled $179.8 million, resulting in a negative working capital position of $73.0 million. Current liabilities include $25.1 million of unearned revenue in relation to hires received in advance as of September 30, 2020 (which represents a non-cash liability that will be recognized as revenues after September 30, 2020 as the services are rendered). Management monitors the Partnership’s liquidity position throughout the year to ensure that it has access to sufficient funds to meet its forecast cash requirements, including debt service commitments, and to monitor compliance with the financial covenants within its loan facilities. Taking into account current and expected volatile commercial and financial market conditions, we anticipate that our primary sources of funds over the next twelve months will be available cash, cash from operations and existing debt facilities. We believe that these anticipated sources of funds , as well as our decision to decrease the common unit distributions and preserve liquidity, will be sufficient to meet our liquidity needs and to comply with our banking covenants for at least twelve months from the end of the reporting period. Our long-term ability to repay our debts and maintain compliance with our debt covenants beyond the next twelve months without reliance on additional sources of finance is also dependent on a sustainable longer-term recovery in the LNG charter market from the market disruption observed in the first half of 2020 as a result of the COVID-19 outbreak.
Preference Unit Distributions
On August 4, 2020, the board of directors of GasLog Partners approved and declared a distribution on the 8.625% Series A Cumulative Redeemable Perpetual Fixed to Floating Rate Preference Units (the “Series A Preference Units”) of $0.5390625 per preference unit, a distribution on the 8.200% Series B Cumulative Redeemable Perpetual Fixed to Floating Rate Preference Units (the “Series B Preference Units”) of $0.5125 per preference unit and a distribution on the 8.500% Series C Cumulative Redeemable Perpetual Fixed to Floating Rate Preference Units (the “Series C Preference Units”) of $0.53125 per preference unit. The aggregate cash distributions of $7,582 were paid on September 15, 2020 to all unitholders of record as of September 8, 2020.
Common Unit Distribution
On November 9, 2020, the board of directors of GasLog Partners approved and declared a quarterly cash distribution of $0.01 per common unit for the quarter ended September 30, 2020. The cash distribution is payable on November 25, 2020 to all unitholders of record as of November 20, 2020.
LNG Market Update and Outlook
LNG demand was 84 million tonnes (“mt”) in the third quarter of 2020, according to Poten, compared to 88 mt in the third quarter of 2019, or a decrease of approximately 4%. Although demand declined globally in the third quarter compared to the third quarter of 2019, it also varied regionally. For example, Chinese LNG demand was 17 mt in the third quarter of 2020, an increase of 13% or approximately 2 mt. In addition, Indian demand was 7 mt, an increase of 13% or approximately 1 mt. These increases were balanced by declines in Europe, the Middle East, Japan, South Korea, North America and South America, which in aggregate saw their demand decline by over 6 mt in the third quarter.
Global LNG supply was approximately 86 mt in the third quarter of 2020, a decrease of over 3 mt, or 4%, over the third quarter of 2019, according to Poten. Supply from the United States (“U.S.”) decreased by approximately 2 mt or 18%, the result of an estimated 112 cargoes cancelled by customers of U.S. export facilities as well as unplanned outages at Cameron LNG following damage to its power supply caused by Hurricane Laura in late August. In addition, supply from Australia declined by nearly 2 mt or 7%, due in part to unplanned maintenance at Gorgon LNG. Looking ahead, approximately 104 mt of new LNG capacity is currently under construction and scheduled to come online from 2021-2026.
In the LNG shipping spot market, TFDE headline rates, as reported by Clarksons, averaged $41,000 per day in the third quarter of 2020, a decrease from the average of $66,000 in the third quarter of 2019. Headline spot rates for Steam vessels averaged $28,000 per day in the third quarter of 2020, a decrease from the average of $43,000 per day in the third quarter of 2019. Headline spot rates in the third quarter were negatively impacted by declines in LNG demand as well as unplanned outages at facilities in the U.S. and Australia as noted above.
Clarksons currently assesses headline spot rates for TFDE and Steam LNG carriers at $105,000 per day and $78,000 per day, respectively. Early indications are for LNG demand to grow in the fourth quarter of 2020, relative to the third quarter of 2020, as demand in October was 2% higher than September, according to Poten. This demand growth has been reflected in the increasing headline spot rates for LNG carriers observed in recent weeks. However, taking into account the impact of the COVID-19 pandemic on the global economy, the forecast growth of the global LNG carrier fleet and expected seasonal trading patterns, there is continued potential for volatility in the spot and short-term markets over the near and medium-term.
As of November 4, 2020, Poten estimates that the orderbook totals 118 dedicated LNG carriers (>100,000 cubic meters, or “cbm”), representing 22% of the on-the-water fleet. Of these, 83 vessels (or 70%) have multi-year charters. 28 LNG carriers have been ordered year-to-date, all for long-term business with no vessels ordered on a speculative basis.
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GasLog Ltd. and GasLog Partners LP Announce Chief Financial Officer Transition
GasLog Ltd. and GasLog Partners LP. announced that, following GasLog’s decision to base its senior management, including the Chief Financial Officer (“CFO”) position, in Greece, Alastair Maxwell has decided not to relocate and will therefore step down from his position as CFO on June 30, 2020. The Boards of GasLog and GasLog Partners have appointed Achilleas Tasioulas, who is presently Deputy CFO, as CFO, effective July 1, 2020. During this period, Alastair will work closely with Achilleas to ensure an orderly transition of responsibilities and Alastair will remain available after leaving to provide his experience and advice, if required.
Alastair Maxwell joined GasLog in February 2017 following 29 years in investment banking and was appointed CFO of GasLog and GasLog Partners in March 2017. His wealth of experience in both energy and finance has been a major asset to the Group across all areas of the Finance function, including leading the debt and equity capital raisings to fund the Group’s expansion.
Achilleas Tasioulas became Deputy CFO of GasLog in December 2019. He joined GasLog in October 2014 as Financial Controller and his role was expanded to Chief Risk Officer, Financial Controller and Head of Tax in August 2017. Achilleas is also a Board Member of Gastrade and a Director of several Group subsidiaries. Immediately prior to joining GasLog, Achilleas was Corporate Controller for NYSE-listed Danaos Corporation for 6 years. He is an ICAEW Fellow Chartered Accountant, has an MSc in Project Analysis, Finance and Investments from the University of York and a BSc in Economics from the University of Macedonia in Greece.
Paul Wogan, GasLog CEO, said, “On behalf of our Chairman Peter Livanos, the Board of GasLog and the Management team, I would like to thank Alastair for the expertise, skill and guidance he has provided over the last 3 years and I wish him continued personal and professional success. I am pleased to congratulate Achilleas on his promotion to CFO. His deep commitment to GasLog, understanding of our business and hands-on experience in Controlling, Financial Reporting, Risk Management and Tax are a huge asset as GasLog focuses on financial resilience, discipline and de-leveraging.”
Andy Orekar, GasLog Partners CEO, said, “On behalf of our Chairman Curt Anastasio and the Board of GasLog Partners, I would like to thank Alastair for his outstanding support of the Partnership’s growth strategy and track record of raising capital in challenging market conditions. Achilleas’ significant contributions to the finance activities of GasLog Partners make him an ideal candidate to succeed Alastair, and his leadership capabilities, risk-based approach and management expertise will be incredibly helpful in the coming years.”
Achilleas Tasioulas commented, “I am delighted to be stepping up to be CFO of GasLog and GasLog Partners at such an important time in the LNG market and in the development of the Group. I look forward to working closely with the rest of the leadership team to harvest our inbuilt growth and to continue to strengthen our financial position today and in the future.”