Golar LNG tightens loss, plans TFDE LNG carrier fleet spin-off

LNG shipper Golar saw its losses tightening in the first three months of the year compared to the previous quarter. 

The company noted its net loss reached $41.7 million, which compares to $312.9 million reported in the last quarter of 2018.

Golar LNG noted that the losses tightened due to lower losses recorded on derivative instruments as well as a smaller loss on the Golar shares total return swap (TRS).

The company further noted that the fourth quarter 2018 loss in respect of Golar’s stake in Golar Partners was substantially higher at $157.9 million following a $149.4 million impairment of the carrying value of Golar’s interest in the Partnership.

During the first quarter of 2019, Golar LNG’s fleet utilization decreased from 93 percent in the forth quarter to 51 percent in the quarter under review.

Golar also recorded a full fleet time charter equivalent (TCE) of $39,300, down from $77,600 in the fourth quarter.

The company did note that it has transformed from a pure LNG shipping company to an integrated LNG energy company, with its investment in FLNG projects, Sergipe power project and the development of further downstream assets.

The initial focus in 2019 has been to take FID on the Gimi (BP FLNG) and Viking (LNG Hrvatska FSRU) projects, secure project finance and award contracts for these projects.  With those tasks completed, the main focus will be to streamline the company and increase the utilization of existing assets.

Golar LNG to spin off its TFDE LNG shipping fleet

At its board meeting, the company has decided to proceed with a spin-off of its TFDE LNG carrier business as well as to focus its activities primarily on FLNG and downstream assets.

This will allow LNG shipping investors more direct exposure to the LNG shipping market and reposition Golar’s core business toward LNG infrastructure on long-term contracts.

Golar are in talks with other owners of similar tonnage to join the new shipping company and have discussed with Golar Power exchanging one of their LNG carriers for the FSRU Golar Tundra.

Management of Golar’s vessels will remain with Golar Management Norway AS.

Assuming the joint structure proceeds as planned, Golar’s direct exposure to the carrier market will then be limited to one modern steam turbine vessel, Golar Arctic, with Golar Viking contracted to be sold in 2020 post FSRU conversion.