Golar LNG, GasLog and Dynagas form first LNG carrier pool

Golar LNG, GasLog and Dynagas have signed an agreement to form ‘The Cool Pool’, the world’s first LNG carrier pool, in which an initial 14 vessels will be pooled from September onwards.

Golar will contribute eight gas ships to the pool, while GasLog and Golar will both add three. Each owner will maintain responsibility for the manning and technical management of their respective vessels.

The vessels will all be modern, “high-quality” and fuel-efficient vessels, all of which will use Tri Fuel Diesel Electric propulsion technology, the companies said today.

The Cool Pool will be run by Tony Lauritzen, CEO of Dynagas LNG Partners, and managed by Morten Nielsen, who will schedule employment for each vessel.

All 14 vessels currently operate in the spot market, but The Cool Pool will focus on employing the ships on timecharters of 12 months or less.

Charters longer than 12 months will require the mandate of the vessel’s respective owner and, if fixed, the vessel will cease to be part of the pool.

“The LNG Carrier Pool allows the participating owners to optimise the operation of the pool vessels through improved scheduling ability, cost efficiencies and common marketing,” the three companies said in a joint statement today.

The arrangement will allow the three companies “the opportunity to deliver benefits, including COAs and other contract forms not previously executed in LNG shipping”, they said.

The longevity of this LNG pool will likely be determined by freight rates going forward, but rates for LNG carriers are so low that now is a good time to launch such a pool.

“It would not be unfair to categorize the current LNG spot market as terrible, with rates right around $30,000/day (well below breakeven) and that is if an owner is lucky enough to actually get a cargo to move,” Jonathan Chappell, fundamental research analyst at Evercore ISI, said today in a note.

“With utilization of the spot LNG carrier fleet tracking at close to 50% through the first seven months of the year, the effective rate earned by vessels not under fixed-rate contracts is about $15,000/day, compared to a cash breakeven level of $50,000-60,000/day. This downturn is likely the impetus for this unique marketing arrangement.”

Holly Birkett

Holly is Splash's Online Editor and correspondent for the UK and Mediterranean. She has been a maritime journalist since 2010, and has written for and edited several trade publications. She is currently studying for membership of the Institute of Chartered Shipbrokers. In 2013, Holly won the Seahorse Club's Social Media Journalist of the Year award. She is currently based in London.
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