Construction of Caribbean FLNG on Course

Antwerp-based LNG and LPG owner and operator Exmar said that the construction of the world’s first floating liquefaction unit Caribbean FLNG at Wison Heavy Industry’s shipyard in Nantong, China is progressing as planned. Start of operations is scheduled from the second half of 2015.

Exmar and Pacific Rubiales ENERGY (through its affiliate Pacific Midstream Holding Corp.), ordered a floating storage and regasification unit (FSRU) in February 2014.

The unit is currently being constructed by Wison Offshore and Marine and is expected to be delivered to the joint venture by mid-2016.

“The marketing of this FSRU with prospective clients is ongoing. Negotiations for the construction of a second floating liquefaction unit in British Colombia (BC LNG) are progressing well,” Exmar said.

Exmar noted that it had recorded significant capital gains on the sale of older LPG tonnage in its half-year results.The group said it had an operating result (EBIT) of USD 58 million for the first semester 2014 including USD 25.9 million capital gain on sale of assets. According to Exmar strong LPG rates are still going forward.

With respect to LPG operations, Exmar said the Midsize (MGC) market, backed by limited vessel availability from both the VLGC and LGC segments as well as the smaller Handysize, has remained firm during the summer months with a couple of record high fixtures.

Market sentiment for the Midsize segment remains positive for the balance of 2014 and well into 2015. The VLGC market has reached and is maintaining historically high levels.

During the coming quarters additional export terminal capacity will be coming on stream and the expectation is that a significant percentage of VLGC tonnage could be absorbed,” the group explained.

BW TOKYO has been fixed for 2 years (of which 40% at floating rate) and will benefit from these favorable market conditions. The results for the third quarter will be positively influenced by the capital gain of USD 9.3 million on the sale of the FLANDERS HARMONY (85,000 m³ – built 1993).

“For the small pressurized vessels, continuing lack of activity both East and West, closure of refineries, current political uncertainty over Black Sea trading, and a series of newbuilding vessels due to enter the market during the coming months, hint towards a period of continued downward pressure for these vessels,” Exmar added.

The group intends to form and list the MLP (Master Limited Partnership) in the US before the end of the year.


Press Release, August 29, 2014


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