LNG shipper Golar LNG reported a net loss of $43.9 million for the third quarter of 2017, narrowing from the $73.8 million in the second quarter of the year.
A pick-up in utilization toward the end of the quarter resulted in a small rise in time charter revenues which increased $1.0 million to $25.0 million in the third quarter of 2017, the company said.
Golar noted in its quarterly report that the shipping market recovery is underway, as shipping demand has exceeded supply growth for the first time since 2013.
“As of today, the effective time charter rates being achieved in 4Q are more than twice that recorded in 3Q. An improving trend is expected to continue into 2018-2019 when shipping supply should lag demand created by increased production,” Golar LNG said.
During September vessels began to pull out of the spot market to service dedicated volumes. Rising LNG prices in the East in response to significant demand from China and Korea also resulted in additional arbitrage opportunities and ton-miles as more US volumes headed further eastward.
“Spot rates have steadily increased from 2-year highs in early October to 3-year highs today with sentiment continuing to improve as we move into peak winter gas demand,” the report reads.
LNG prices have also surprised to the upside. Current JKM prices at around $9.80 per mmbtu compare to $7.10 this time last year. Similarly, European prices of $7.70 compare to $5.90 last year, the company said.
Looking to 2018, around 45 vessels are scheduled for delivery, equivalent to 10 percent of the current fleet. This compares to more than 12 percent expected production growth for the year.