Awilco LNG posts lower freight income in Q2

Oslo-based Awilco LNG, owner of five LNG tankers, reported a freight income for the second quarter of US$7.3 million, down from US$12.1 in the previous quarter.

The decrease was due to lower utilisation and rates for both WilGas and WilPride, according to Awilco LNG’s half-year report.

Fleet utilisation for the quarter ended at 34 percent (trading vessels), compared to 67 percent in the first quarter.

Net loss for the period was US$11.7 million, compared to a loss of US$4.7 million in the previous quarter, Awilco LNG said.

LNG market

The declining gas price trend in the Far East came to a halt in the quarter as the price persisted at just above USD 7/MMBTU. Towards the end of the quarter the price started to increase slightly for delivery in September, Awilco LNG said in the report.

However, the marginal increase in Far East gas price has not re-opened any arbitrage opportunities between West and East.

After a disappointing 1st quarter, the LNG import to China improved somewhat as a result of reduced domestic gas production, and was up 2 percent compared to same period last year.

Chinese imports were down by about 3 percent in the 1st half compared to same period last year. The marginal increase in LNG import to China was offset by a declining LNG import trend into both Japan and South Korea, the company said.

Despite sustained low LNG import to Asia and limited arbitrage opportunities, the LNG shipping activity increased somewhat during the last part of the quarter. However, as a result of continued oversupply of available vessels, market rates did not improve and spot rates for TFDE LNG carriers weakened from USD 35,000 per day at the beginning of the quarter to USD 30,000 at the end of the quarter, it added.

LNG World News Staff; Image: Awilco LNG