Oslo-based LNG shipping company Awilco LNG reported third-quarter freight income of US$8.3 million, down from $20.8 million in the same quarter a year ago.
In the first nine months of this year, Awilco LNG’s freight income was at $27.7 million, as compared to $60.8 million in the same period in 2014.
However, the company’s freight income in the third quarter rose as compared to $7.3 million in the previous quarter.
“ The increase was due to improved utilisation of WilPride, from 3% in Q2 to 56 % this quarter ,” Awilco LNG said in its results report on Tuesday.
Fleet utilisation for the quarter ended at 68% (trading vessels), compared to 34% in the second quarter.
The company’s profit before taxes dropped to $6.5 million in the third quarter, as compared to $11.7 million in the previous quarter.
LNG market
The Far East gas price was relatively stable in the quarter, starting at just above $7/MMBTU and ending at about $6.50/MMBTU on the back of signs of increased LNG production, Awilco LNG said in the report.
“ The marginal reduction in the Far East gas price further narrowed the arbitrage opportunities between West and East ,” Awilco LNG said.
LNG import to Asia has remained weak in Q3. Chinese LNG imports continued the weakening trend and are down by about 4% over the first 9 months, mainly as a result of increased pipeline gas import.
Following mild weather and restart of nuclear power plants, Japanese and South Korean LNG imports have been reduced by 3.3% and 7.4% respectively.
As a result of continued low LNG import to Asia, limited arbitrage opportunities and continued oversupply of available vessels, the LNG shipping activity and rates remained weak during the quarter, the company said.
Rates for TFDE LNG carriers stayed at USD 30,000 per day level throughout the period with low utilization, Awilco LNG added.