Cool Company (CoolCo), an owner, operator, and manager of LNG carriers, has secured a new time charter agreement with Santos Shipping Singapore for one of its TFDE vessels that will undergo LNGe upgrades to reduce emissions.
The 12-month charter agreement is scheduled to commence in the first quarter of 2024.
The vessel is due to undergo its scheduled drydock in the third quarter. At this time, CoolCo intends to upgrade the vessel to LNGe specifications which include the addition of reliquefaction capability via state-of-the-art sub-coolers, as well as air lubrication systems and a range of optimizations and upgrades intended to enhance efficiency and reduce emissions.
Through its LNGe upgrade program, as part of a fleet-wide improvement target of 35% between 2019 and 2030, CoolCo aims to reduce its emissions by 10-15%.
The company noted that the charter with Santos takes its fleet utilization to 100% until ist next vessel becomes available, not before the end of the second quarter.
This enables CoolCo management to extend its total operating revenue guidance to $88-89 million for the first quarter of 2024 and $84-85 million for the second quarter, subject to no technical off-hire. The company anticipates a lower expected revenue range in the second quarter of 2024 primarily due to off-hire during a scheduled drydock of another vessel that is expected to be completed within the same quarter.
Richard Tyrrell , CEO of CoolCo, commented on the charter deal: “We are delighted with this innovative agreement that provides and aligns incentives between the owner and the charterer, which is expected to enhance efficiency and minimize emissions on one of our modern TFDE vessels .
“This groundbreaking charter is the first to incorporate our LNGe upgrade and our first with Santos. It serves as a model for joint participation in the benefits of our investment in upgrading existing vessels.”
In the second half of 2024, CoolCo expects to welcome 2-stroke LNG carrier newbuilds, namely Kool Tiger and Kool Panther. The newbuilds will have a cargo capacity of 174,000 cubic meters, a GTT Mark III Flex Membrane cargo tank system, reliquefaction, air lubrication, and shaft generators.
South Korean shipbuilder Hyundai Samho Heavy Industries started the construction of CoolCo’s first 2-stroke LNG carrier in October 2023.