November 23, 2017 / 11:35 AM / a year ago

BW LPG sees better market sentiment for 2018 vs 2017

OSLO, Nov 23 (Reuters) - Natural gas shipper BW LPG expects a better freight market in 2018 than in 2017 and will not make any new long term contracts below $20,000 per day for its very large gas carriers (VLGC), CEO Martin Ackerman said on Thursday.

** Generally the sentiment for 2018 is more positive than 2017 but of course q3 has been a tough quarter which creates some short-term uncertainty, he said

** BW LPG, which owns and operates 52 very large gas carriers (VLGC), has a contract coverage of 32-39 pct for Q4 2017 and 12 pct for 2018

** CEO says it’s becoming interesting to fix vessels at a timecharter rate of about $20,000 per day for 1 year but not for a longer period due to expectations of an improved market

** CEO says we are speaking to a number of contract partners but so far the difference between bid and ask has been to wide

** VLGC freight market has been weak in 2017 due to numerous newbuildings entering the market after VLGC rates peaked above $100,000 per day in 2015 vs currently around $12-13,000 per day in the spot market

** BW LPG’s VLGCs earned on average $15,200 per day in Q3 while fleet utilisation was down to 82 pct, which gave a net loss of $26.7 mln

** Still, 29 VLGC vessels are under order out of a global fleet of 259 ships while 19 vessels have been delivered in 2017

** CEO says we should see a net fleet growth of 3 pct over the next two years

** At the time LPG production growth is expected to grow around 6 pct, driven by strong growth in U.S (Reporting by Ole Petter Skonnord, editing by Terje Solsvik)

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