The market for the very large gas vessels has been sizzling in recent years, with VLGC vessels sailing for record profits in the spot market. And this development does not seem to be slowing down yet, as evident in the result for the first quarter of the year from Oslo-based Avance Gas - and not least the carriers expectations for the years to come.

The carrier achieved a first quarter result of USD 23.8 million, where the fleet on average sailed for time charter rates of USD 64,832 a day, while the time charter profit landed at USD 40 million compared to USD 34.8 million in the fourth quarter last year. A very pleasing result, writes CEO Christian Andersen in an e-mail to ShippingWatch.

Do you want to stay up to date on the latest developments in International shipping? Subscribe to our newsletter – the first 40 days are free

The freight market of LPG transports grew in March, where especially the export of LPG from the Middle East and the Gulf of Mexico grew. 2015 did not begin quite as sharply, Avance notes in the financial report, which in particular illustrates a surplus of vessels due to unforeseen maintenance of refineries in Saudi Arabia at the end of 2014.

In March, Avance Gas's spot index reached USD 79,000 compared to about USD 53,000 in January and February. And especially the strategy to have vessels in the spot market contributed to the quarterly result, informs Christian Andersen, who expects that the TCE rate trend will continue:

"Normally Q2 and Q3 would be stronger than Q1; although this won't necessarily hold true this year. However, we expect that it will at least continue," he tells ShippingWatch.

BW LPG: Good times will continue another year

"The biggest challenge is the orderbook and the vessels that will be delivered during 2015 and 2016. With expected exports from the US and to Asia in particular, we expect a strong market for the next 18 months."

New ships coming closer

Currently, the orderbook for new VLGCs stands about 50 percent of the existing fleet, and this will without a doubt put downward pressure on the record levels in the long run. Behind the many new ships is Avance Gas itself along with the rivals BW LPG and Dorian LPG. This has caused many to point to the necessity of a consolidation among the players in the market, where Dorian LPG at the beginning of the year entered into a pool cooperation with Japanese Mitsui's subsidiary Phoenix Tankers with eight VLGCs so far, and Danish Tim Truels in charge. Avance Gas has previously advocated increased cooperation in the industry, and in this regard did not hide the carrier's interest in Dorian, which counts Scorpio among others in its circle of owners.

Evergas CEO new head of BW LPG

Christian Andersen of Avance Gas - a cooperation between John Fredriksen's Frontline 2012, Stolt-Nielsen and Sungas Holdings - does not at this time see consolidation as a must, but it is something that "we look to positively and we are positively positioned towards," he says.

"We have high expectations for 2015. We're a little cautious with numbers, but we expect a fleet exploitation of over 95 percent, which will provide strong freight rates," he writes.

According to the Norwegian analyst agency Fearnleys, the results from Avance are in line with expectations, although the average rates of USD 64,832 a day are somewhat higher than expected. The rates for VLGC vessels will maintain the level during the upcoming peak season, estimates Fearnleys.

Do you want to stay up to date on the latest developments in International shipping? Subscribe to our newsletter – the first 40 days are free

Fearnleys: Strong US market boosts successful gas giants

Dorian LPG more than doubles its revenue

Avance on Dorian: We want all or nothing