I.M. Skaugen reconfirms African small-scale LNG contracts

Norway-based marine transportation service company I.M. Skaugen reconfirmed its long-term charter contracts for a small-scale LNG project in Africa. 

The company said in its quarterly report that the contracts, for three multigas vessels, initially signed in January, have been reconfirmed in May and most recently on June 1, noting the project is “progressing well.”

I.M. Skaugen expects to reach financial close soon with first gas to be transported in July 2017.

Under the reconfirmed agreements, IMS will provide the shuttle/feeder services and floating storage support, as well as storage and offloading of LNG for a client with existing gas-fired power plants in Africa.

The charter contracts are for two 10,000-cbm and one 12,000-cbm MG vessels currently operated by the group. The project will commence operation with two MG carriers but expect the demand for LNG volumes for the existing clients to soon increase so that we will operate three ships under the contract.

All equipment required is on location or on a ship en-route to the location and ready to be installed.

Civil works at the first power plant which will be fueled by LNG, are underway with cement platform around vaporizers and tanks complete. At the second power plant, all foundations are ready for pouring concrete, and I.M. Skaugen said the foundations will be ready for the installation of the tanks and vaporizer by June 10. Cryogenic tanks have already been supplied to the site.

Net loss narrows quarter on quarter

I.M. Skaugen reported a net loss of $6 million during the first quarter of 2017 narrowing in comparison to the $9.5 million net loss in the fourth quarter of 2016.

However, compared to the first quarter of 2016 when IMS reported a $1.6 million net loss, the loss widened, due to the prevailing difficult market conditions, within the LPG and petrochemical gas segments.