Watch stocks you care about
Your own personalized stock watchlist!
It's a 100% FREE Motley Fool service...
The Gastech 2014 Conference & Exhibition was held from March 24-27 at the Korea International Exhibition Center in Seoul. According to the Gulf Times, Alaa Abujbara had this to say:
Each year Qatargas has responded to market trends and signed new supply commitments. In recent years, we have participated in the commissioning of 12 new regasification terminals. We also signed several new long-term LNG supply contracts with Asian buyers in response to changing market conditions.
Not all operators seeing higher rates
While Qatargas' Chief Operating Officer of Commercial and Shipping is optimistic, some LNG transportation operators may have cause for concern. Not all operators are going to be profitable this year, especially those with a large percentage of medium to larger size newbuild additions. Unlike StealthGas (NASDAQ: GASS ) and Navigator Gas (NYSE: NVGS ) , Golar LNG Limited (NASDAQ: GLNG ) and Teekay LNG Partners have fleets with vessels that are predominately medium to large in size.
During the fourth quarter of 2013 short-term rates for LNG carriers gradually decreased...A lack of available LNG cargoes in the Atlantic basin reduced demand for short-term LNG charters and more ships became available as newbuilds were delivered. This pressure on short-term rates is likely to continue into Q1 2014 as open newbuilds continue to be delivered at a faster pace than liquefaction projects come online.
But, this isn't the case with all operators. Navigator Gas is experiencing an increase in rates for its fleet, primarily because Navigator Gas has a concentration in smaller vessels. Here's an excerpt from the most recent Q4 earnings release:
During the fourth quarter of 2013, the average time charter equivalent rate across the entire fleet, including our fully refrigerated vessels was approximately $830,500 per calendar month ($27,300 per day), compared to $798,230 per calendar month ($26,243 per day) for the comparable period in 2012.
Navigator Gas is the largest operator and owner within the handysize 15-25,000cbm gas carrier segment. Our current fleet consists of 24 modern vessels with versatile capabilities including ethylene, semi-refrigerated and fully refrigerated units. An additional five 21,000cbm ethylene-capable and two 22,000cbm semi-refrigerated new-build vessels will be delivered during 2014 and 2015.
One of the main differences between Navigator Gas and most other operators is the size of the average carrier in its fleet. As newbuilds get larger and the oldest -- and smallest -- LNG tankers in the market are scrapped, rates for handysize vehicles are going up. While there's a chance companies with larger size vessels in their fleet may be able to capture some of the new spot market liquefaction capacity as it comes online, I believe the market will be looking for companies like Navigator Gas and Stealthgas to provide the smaller vessels needed to compliment the existing chartered.
An investing strategy to ride out America's energy bonanza
You already know record oil and natural production is changing the lives of millions of Americans. But what you probably haven't heard is that the IRS is encouraging investors to support our growing energy renaissance, offering you a tax loophole to invest in some of America's greatest energy companies. Take advantage of this profitable opportunity by grabbing your brand-new special report, "The IRS Is Daring You to Make This Investment Now!," and you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.