BW LPG will take delivery of new VLGCs ahead of the summer 2021 corresponding to 15 percent of the fleet. However, a "considerable" order book does not make CEO Martin Ackermann doubt that the upswing will continue next year.
The rates have close to doubled for Avance Gas in the third quarter, where few new vessels on the water and increasing US exports of natural gas were favorable. However, the bottom line remains in the red for the carrier.
2017 was a year characterized by setbacks for the major gas carriers, but for this year, VLGC operator Avance Gas expects a recovery. The company fared slightly better in the first quarter this year than in the previous quarter.
Norwegian Avance Gas suffered a slight setback in the second quarter with a loss of USD 11.1 million. Lower exports of petroleum gas from the US were a major factor and the rough market will continue into 2018, says management.
The market for the transport of LPG will be held down by overcapacity across the majority of segments over the next two years, writes Drewry. The analyst firm only sees opportunities for better rates for the small gas vessels, where fleet growth will be minimal.
The downturn in the LPG market in 2016 took Avance Gas by surprise – and 2017 looks bleak as well. The company plans to remain calm in terms of consolidation and acquisitions until the market has improved, says CFO Peder C. G. Simonsen, to ShippingWatch.
The door remains wide open to the executive office at Avance Gas if industry peers are looking for collaboration partners, CEO Christian Andersen tells ShippingWatch. He explains that the gas carrier is still looking for acquisitions even though BW LPG has made a bid for Aurora LPG.
Norwegian gas carrier Aurora LPG took a hit from the low rates in the first half of 2016, but management points to signs that the crisis is temporary in nature and that rates could rebound to sustainable levels already this year.
Avance Gas' revenue was more than halved and the result went negative in the second quarter. The markets are disappointing, says management from the LPG carrier which boasts a fleet of 14 VLGC gas vessels.
The LPG vessels have entered a new phase which is in effect an elimination contest among the major players. Once the shipping industry's safest bet, plummeting rates and overcapacity have now altered the scenario completely, and only one of the major players looks set to outperform the rest.
Norwegian Avance Gas struggled with earnings in the first quarter. More new VLGCs and the off-season are putting a cap on gas rates, the carrier's interim report shows. "Rates have declined more than we had hoped," the CEO tells ShippingWatch.
BW LPG delivered a record result in 2015, but CEO Martin Ackermann is more subdued in regards to the coming year. "The whole world is under pressure so it's hard to be really optimistic right now," he says in an interview with ShippingWatch.
It is no longer a heyday for the major gas segment, but the daily rates are still good enough for Avance Gas to deliver a solid profit for the quarter and double the net profit for 2015 compared to 2014.