The LNG Market

LNG Tanker company Flex LNG (FLNG) reported their q4 2021 results on 2/16/22.
The company took delivery of three LNG tankers in 2021 (2 in Jan, 1 in May) to take its fleet size to 13 tankers. What can the owner of 13 LNG tankers tell us about the global LNG market?
Quite a lot actually.

  1. How country LNG demand changed in 2021 (Slide 14)
  2. How country LNG supply changed in 2021 (Slide 15)
  3. USA increased exports the most in 2021 (by 49%), and have the opportunity to bump exports up in 2022 (Slide 16)

But IMO, the real useful data was provided in later slides
4. The arbitrage opportunities in Europe vs Asia (Slides 16-20)
5. The LNG spot market isn’t as straightforward as it seems (Slides 22-23)
6. Flex LNG mgmt used #4 & #5 to explain the difference between the Dec 20 - Jan 21 window and the Dec 21 - Jan 22 window
7. Flex LNG strategy to factor in the above and deliver the best return (Fleet contract coverage (Slide 4-6)
8. Other factors (Slide 25-26)…

In a prior thread, I had said FLNG had 5 vessels chartered to Cheniere. It is actually, 4 vessels with an option for a 5th. Given Cheniere has another train of Sabine Pass starting production in 2022, it seems likely they will opt-in for FLNG’s modern tanker. Currently, FLNG have a single vessel trading spot

My model for FLNG dividend is that they will likely have a variable dividend policy with higher payouts for Q3 & Q4. Since Q4 (2021) is paid out the following year (2022), I think Q1 2022 dividend dips a little. Then again, FLNG completed some financing moves that freed up more cash than they anticipated.
Either way, I’m glad I built up my FLNG stake between Dec 2021 and last week.