News bulletin – tanker shipping

NEWS BULLETIN

TANKER SHIPPING

KIRBY COOL ON COVID

Kirby Corp has reported fourth-quarter net earnings of $11.0m, slightly less than half that posted for the same period in 2020, although there was a $5.7m one-off charge related to changes in Louisiana tax law. For the full year, consolidated revenues rose by 20 per cent to $591.3m.

“Kirby’s fourth quarter adjusted earnings sequentially increased driven by improved results in the marine transportation businesses,” says David Grzebinski, president/CEO of Kirby. “Our inland business experienced improved market fundamentals due to strong refinery and petrochemical plant utilisation and increased customer volumes. As a result, our barge utilisation steadily increased during the quarter with an average in the mid-to high 80 per cent range. Favourable market dynamics also led to increased sequential and year-onyear spot market pricing, as well as higher rates on term contract renewals for the first time since the start of the pandemic. However, the quarter was not without its challenges as poor weather conditions yielded a 55 per cent sequential increase in delay days. In December, escalating cases of the Covid-19 Omicron variant contributed to crewing challenges.”

Grzebinski is optimistic that 2022 will see a continuation of the recovery in economic and industrial activity, with a parallel impact on the inland barging market. He expects an increase in capital spending this year to meet that growing demand. However, growth in the inland marine business in the first quarter is expected to be “modest in the low single digit percentage range due to the impact of winter weather and the Omicron variant, which is resulting in crewing challenges, lost revenue, and incremental costs”. kirbycorp.com

AVANCE ENJOYS INEFFICIENCIES

Avance Gas, one of the major VLGC owners, has reported timecharter equivalent earnings of $143.0m for 2021, down slightly on the $144.1m posted in 2020. Operating profit remained stable but net profit fell by more than half to $32.1m.

The VLGC freight market finished the year strongly, Avance reports, though much of this was due to inefficiencies in vessel operations. Congestion in the Panama Canal continues to absorb capacity through increased waiting times and also prompted many operators to shift the ballast leg from Asia to the US Gulf via Suez or around the Cape, which adds at least ten days to the journey. There is also growing congestion at discharge ports in Asia.

Looking ahead, Avance says that US LPG production is strong and exports are predicted to grow by some 10 per cent this year, along with additional volumes from the Middle East. Much of this will be taken up by new propane dehydrogenation plants due onstream in China this year. Avance is also continuing with the sale of its 12-year-old VLGCs as it takes delivery of new dual-fuel units, the second of which is due for delivery this month. Sale of the 2008-built Thetis Glory was completed at the start of March, netting a book profit of some $6m. www.avancegas.com

BW SPENDS FOR THE FUTURE

BW LPG has reported 2021 timecharter equivalent income of $465.6m, down 15 per cent compared to 2020. EBITDA was down 25 per cent at $311.7m and after-tax profit fell 24 per cent to $186.4m. Spot voyage income was well down and finished the year in a weakening VLGC market, although some of this decline was compensated for by an increase in timecharter income. The company has also had a number of vessels in drydock over the year for retrofitting with LPG-capable engines and now has 12 dual-fuel ships on the water. Over the year as a whole, BW LPG invested some $92m in fleet upgrades.

Looking ahead, BW LPG says geopolitical uncertainty clouds the VLGC market for 2022. Near-term rate volatility could be triggered by factors such as bunker price shocks, changing trading patterns, unexpected LPG inventory management and changes to shipping

inefficiencies. “For 2023 onwards, despite the uncertainties from the heavy newbuilding delivery schedule and the implementation of IMO EEXI regulations, we remain confident on the long-term VLGC market as LPG remains a viable transition fuel towards decarbonisation and the use of cleaner energy,” the company states. www.bwlpg.com

BIG BUCKS FOR BWEK

BW Epic Kosan, a specialist in small gas tankers, has reported 2021 revenues of $329.1m, almost 80 per cent up on the 2020 figure following the merger of the Epic Gas and Lauritzen Kosan fleets. EBITDA was up 58.5 per cent at $92.7m and net profit, before exceptional items, rose 76 per cent to reach $19.2m.

Charles Maltby, CEO, puts the improvement down not only to the increased scale of the fleet but also to improved market conditions and effective cost management. For the year as a whole, average daily timecharter earnings rose 11 per cent compared to 2020 to reach $11,126, although average operating costs rose by 16 per cent following the arrival in the fleet of semi-refrigerated and ethylene tankers from the Lauritzen Kosan merger.

“It has been a year of delivering under pressure,” Maltby says. “We are not immune to global inflation, with our OPEX impacted in areas such as crew costs and lube oils. Covid-19 OPEX increases related primarily to crew change expenses and freight forwarding costs for spares, and increased offhire for our fleet as we positioned vessels to facilitate crew changes and meet quarantine requirements. We are grateful to our seafarers for their loyalty and perseverance.

“2022 has begun with good signs for demand growth in residential LPG, increasing Asian and US petrochemical exports, and increased activity in European refining and petrochemical plants,” Maltby continues. “We anticipate 2.9 per cent growth in LPG seaborne trade over 2022, whilst smaller gas vessel fleet growth forecasts are 1.9 per cent before any scrapping, which should result in positive earnings momentum.” bwek.com

HGK TO GROW LOW-WATER FLEET

HGK Shipping has ordered another low-water gas tanker from Dutch yard TeamCo for its Rhine system fleet. The new Gas 95 vessel, due for delivery in the second half of 2023, will again feature a diesel-electric drive system, helping to further HGK’s plan to provide innovative and sustainable inland waterway shipping.

“We’re continuing our journey towards sustainability with great determination with the Gas 95. At the same time, we’re arming ourselves to face the challenges of climate change by expanding our fleet that is able to operate in shallow waters,” says Steffen Bauer, CEO of HGK Shipping. “As a result, we’ll be in a position to safeguard supplies of raw materials for the industry despite increasingly frequent low-water periods on European rivers.”

HGK Shipping expects to place an order for a third ship in the series this year, with four more planned over the next few years. hgkshipping.de

FIRST DUAL-FUEL FOR IINO

Iino Kaiun Kaisha has taken delivery of Calluna Gas, its first dual-fuel VLGC, from Kawasaki HI. The new vessel will work on a charter contract to Equinor. “We will strengthen our relationship with Equinor by adding this new environmentally friendly vessel to our new timecharter contract with the company, and we will continue to strengthen our partnerships with important customers in Japan and overseas,” the company states.

Iino has put sustainability as a core element in its strategy to 2030 and the construction of this dual-fuel vessel is part of that effort. The new vessel, which has a capacity of 87,200 m3 , has an LPG fuel tank on the upper deck, separate from the cargo. Using LPG fuel will allow the ship to comply with the IMO 2020 regulation on sulphur oxide emissions and also significantly reduce emissions of CO2, NOx and particulate matter. www.iino.co.jp