Exmar swings to loss as Tango FLNG is yet to start operation

Belgium’s Exmar, the Nicolas Savery-led shipowner, swung to a $16 million loss in 2018 following a $28 million profit in 2017. 

Exmar’s operating results for its LNG division over the full year 2018 was $21.4 million, including a capital gain of $30.9 million on the sale of Excelsior,  compared to $47.6 million for 2017, including a $70.0 million capital gain on the sale of Explorer, Excelerate and Express and a $22.5 million impairment on the Excel.

LNG shipping cash flow is generated by the LNG carrier Excalibur under her long-term time charter contract until early 2022, performing in line with her contract.

The debt on the Excalibur has been refinanced until the end of her time charter. This will guarantee a stable income in the coming years and puts Exmar in a position to take advantage of new LNG shipping opportunities as they arise, the company said in a statement.

Exmar further noted that the barge-based Floating Storage Regasification Unit (FSRU), contracted to Gunvor and delivered from the yard in 2017, is currently still at Keppel Shipyard, Singapore. Exmar awaits instructions and a timeline for further mobilization as Gunvor might elect.

Gunvor has certain termination rights in line with market practice and such rights exist as long as no agreement is reached between Gunvor and its customer for the deployment of the unit.

In the meantime, the FSRU is on hire as from October 2018. Exmar has reached an agreement in principle for the financing of the unit.

The Tango floating liquefaction barge arrived in Bahia Blanca Argentina on February 4, 2019. The Tango FLNG is already installed and moored in Bahia Blanca, Argentina, only two-and-a-half months after contract signing.

The installation and commissioning of the unit has started on arrival and Exmar’s management remains comfortable that the unit will be able to start its gas
liquefaction operations in the second quarter of 2019 at which time a significant portion of the restricted cash under the financing of Tango FLNG will be released.

The yearly production of about 500,000 tons LNG will account for an estimated annual EBITDA of $43.0 million per year with a potential upside depending on the market environment and the actual production of the unit.