Awilco LNG ASA has reported that its full year freight income fell in 2015 to US$37.4 million, compared to US$78.5 million in 2014. The company attributed the fall to low rates and reduced utilisation caused by new vessel deliveries, reduced ton-mile as the price arbitrage West to East was limited, and limited new LNG production.
The company’s full year EBITDA for 2015 stood at US$15.8 million in comparison to US$41 million in the previous year.
Awilco LNG also confirmed that it posted a net loss before tax of US$36.3 million in 2015, compared to a loss of US$2.7 million in 2014.
LNG market update
Awilco LNG said: “Following increased seasonal demand, the Asian LNG imports improved in 4Q15 compared to 3Q152015. Despite the increase in Q15, the estimates for full year 2015 were still disappointing and down 4.3% year on year. The largest reduction came from Korea, Japan and China, which were down by approximately 4.2 million t, 3.3 million t and 1.5 million t respectively. On a positive note, the LNG imports to Jordan, Egypt and Brazil all increased in 2015.
“The Far East gas price increased slightly during the quarter, starting at just above US$6.6/million Btu and ending at about US$6.9/million Btu. Despite the marginal increase in the Far East price, there were no arbitrage opportunities between West and East, which had a negative impact on ton-mile. According to market analysts the inter-basin trade was down by 26% in 2015, resulting in a reduced average sailing distance of 5.9% year on year.
“Due to continued overhang of vessels combined with negative ton-mile development, market rates for TFDE LNG carriers were unchanged at about US$30 000/d throughout the period. There were pockets of increased activity towards the end of the year and at the start of the New Year, but so far with little impact on the rates.
“Additional LNG production capacity was added in 4Q15 as Gladstone LNG and Queensland Curtis T2 in Australia came online. However, following start-up late in 2015, ramp-up delaying full effect of production as well as production problems in Egypt, Yemen and Algeria, estimated LNG export increased only by 2% in 2015 according to market analysts. In 2016 the production start from Australia Pacific has commenced as scheduled, whereas the first US LNG exports from Cheniere’s Sabine Pass is reported delayed to February/March. Furthermore, the long awaited re-start of Angola is reported to have started re-commissioning. In total more than 45 million tpy of new LNG capacity is scheduled for start-up in 2016. Analysts forecast the expected production capacity in 2020 to 450 million tpy, which represents an increase of more than 50% compared to the 2015 capacity.
“Despite the weak LNG transportation market in 2015, newbuilding ordering was at a relatively high level in the first half of 2015, but eased off towards the end of the year. In total, 20 newbuildings were ordered in 2015, compared to above 50 in 2014.”
Edited from press release by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/lng-shipping/12022016/awilco-lng-reports-net-loss-in-2015-1993/