The world's top shipping magnate John Fredriksen is close to solving a dispute with British utility BG Group (BRGXF)
and could soon see increased earnings for four of his ships, shipping sources said. "Their differences have been resolved and they've reached an agreement, but that still hasn't been finalized," said an LNG industry source.
The dispute first became public last month when Norwegian Golar LNG (GLNG)
, in which Fredriksen has a half share, said it might be considering legal action against the New York broker that fixed the four Golar ships into the barely profitable deal with BG.
Both Golar and BG declined to comment on the rumor of a resolution, but other LNG industry sources said there had been a "re-organization of rates," and the deal could be completed within weeks.
Golar acquired six Liquified Natural Gas (LNG) carriers through the acquisition of Osprey Maritime earlier this year but a long-standing Osprey contract with BG prevented Golar from taking advantage of a booming market. Sources said the threat of legal action against BG's broker Poten had been designed to put pressure on the energy major to renegotiate.
Since the charter deal was originally put together, charter rates for LNG carriers have rocketed, fuelled by a worldwide surge in LNG production and a U.S. thirst for imported energy. A Golar prospectus issued prior to its listing on the Oslo stock exchange last month showed four ships locked into rock-bottom charters of $33,750 per day to BG.
BG was chartering them back out for LNG transport projects at rates more than double that and retaining a healthy margin, but brokers said the opportunities had cooled in recent weeks on the back of falling U.S. gas prices. "When U.S. gas prices were $8 per million BTU, BG was raking it in, but now they're back down to around $3 per million BTU, and the LNG shipping market is not so red-hot," said a broker.
Golar Director Tor Olav Troim said the first set of interim results would be out at the end of this month. - (Reuters)