Q4 2021 Navigator Holdings Ltd Earnings Call
Thank you for standing by ladies and gentlemen, and welcome to the Navigator Holdings conference call on the fourth quarter 2021 financial results, we have with US Mr. Doug <unk> Chairman, Mr. Niall Nolan Chief Financial Officer, Mr. Within Lindemann Chief commercial.
Fisher and Mr. Michael showed that overwriting of yourself as a company.
This time or about to sit beds are in a listen only mode. There will be a presentation followed by a question and answer session at which time if you wish to ask a question. Please press star one on your telephone keypad and wait for the automated message. That's why you see your line Nishu, but I must advice you that this conference is being recorded.
And now I pass deferral to one of your speakers Mr. Robin. Please go ahead Sir.
Good morning, everyone.
When it comes to their navigate the gas fourth quarter earnings call and I can I'm glad to give some introductory comments.
As we conduct today's conference calls, we will be making various forward looking statements. These statements include but are not limited to the future expectations plans and prospects from both a financial and operational perspective.
These forward looking statements are based on management assumptions forecasts and expectations expectations as of today's date and are such subject to material risks and uncertainties.
Actual results may differ significantly from our forward looking information and financial forecast.
Additional information about these factors and assumptions are included in our annual and quarterly reports filed with the Securities and Exchange Commission.
Today's call will include comments from Knight Nolan, our Chief Financial Officer, and Oregon, Lindemann, Our Chief commercial officer.
Yes, we are confronting specials with geopolitical times in Europe , and then shipping I wanted to share some thoughts some thoughts with you.
Of course, the overwriting news of the last two weeks is Russia's invasion of Ukraine.
The future geopolitical.
Now in Europe is being reshaped as we speak the sudden invasion of Ukraine will have major medications not just for the energy market, but also for the security and well being of Europe .
Major ramifications in energy commodity and shipping markets have already stopped it.
We all want to know the impact on shipping, but without knowing the end game.
And imposed sanctions, we can't estimate the scope and duration of potential disruptions.
Crazy sanctions to the Russian economy and its companies.
Yes in fact, the trade supply chain already and it's increasing commodity prices.
Open markets and free trade or about buying from the nearest most competitive source.
Political tensions and sanctions normally increase their lives because of shifting trade patents, which require cargo shipping over longer distances.
This of course supports increased freight rates.
Europe will seek to become less dependent from restaurant fossil fuels oil refined products natural gas LPG coal and others.
Which of course is up to easy to tackle short term.
Now talking about navigator I would like first to thank the staff of the company. So let's quit until their continued hard work during the final quarter of 2021.
As a result of their dedication to our company during the period. We started this year in a stronger position.
Another thank you should go to the executive management team comprised by Niall, our CFO bike, leaving our Chief commercial officer, and Mike go through there our chief operating officer.
They had been working very well together.
Together and bleeding ethics, leading the company has a strong team the last five months.
Now, let's go to slide three where we have some highlights.
Operating revenues were up 26% compared to Q3 2021.
And before impairment losses, net income was $16 7 million up 149% when compared to the $6.7 million of Q3 2021 .
Yeah.
Fleet utilization increased compared to the same period in 2020. Furthermore, the company has seen increased ethylene volumes from its Morgan's point ethylene terminal joint venture in Houston.
Well, it's increasing ethane exports from the United States, primarily pricing competitiveness compared with oil.
In addition, we continue to see your synergies and contributions to our revenue as a result of Targa smoke and.
We are delighted by the new opportunities this has brought us.
In the face of uncertainty with world events.
Company can be confident that it's a robust balance sheet.
So on cash position flexibility and unique position in the market will continue to facilitate further growth.
I would like to take this opportunity to welcome Doctor I need that they brought to the board of directors of navigator gas.
Neither was appointed since March and we look forward to we're coming here to the navigate the board and to benefiting from her considerable industry experience.
This exciting time for navigate the doctor there will be an extremely valuable contributor to our board of directors.
Okay I would like.
I would like now to hand over the call to Niall Nolan, our chief financial Officer navigate.
Yes.
Who will give you a more detailed financial review thank you.
Thank you Doug and good morning.
During the fourth quarter of 2021, the company as Doug mentioned generated a net income of $16.7 million or $22.22 per share before impairment losses of nine vessels of $63 7 million. This is shown on slide six.
This is considerably higher than the net income of $3 4 million for the fourth quarter of 2020 or the net income of $6 7 million for the previous quarter Q3 of 2021.
So $16 7 million is the highest quarterly net income since the first quarter of 2016.
Late to market improvements across the shipping segments as well as increased volumes through the ethylene marine export terminal.
Adjusted EBITDA for the fourth quarter was $55.2 million compared to 32 million for the fourth quarter of 2020 and $40.3 million for Q3 of 2021.
Total vessel operating revenue for the quarter was $129.4 million compared to $87.4 million for the comparable period of last year.
And the $102.7 million generation to join the prior quarter Corp, third quarter of 2021 .
The $42 million increase in revenue between the fourth quarters.
This year and last was in part as a result of the seven additional handy size vessels, joining the fleet as part of the ultra gas transaction in August 2021, which accounted for.
Seven point of $5 million of that increase and another $15.9 million as a result of revenues derived from the unique asset pool, representing revenues from the smaller unit golf's vessels.
As a reminder, the union gas fleet consisted of 18 vessels.
Seven of which are have decided its 22000 cubic meter semi refrigerated vessels are similar to those operated by navigator and 11 were smaller for 4000 to 12000 LPG our ethylene vessels.
Two of the older smaller vessels have now been sold the 1999 happy Bride was sold in October 2021 for $4 $75 million.
And then.
1999 build happy Bird was sold for $6 $1 million earlier this month.
Average charter rates rose two to approximately 22 and a half thousand dollars per day.
Hey, Tom as a $684300 per month for the fourth quarter.
From $21123 per day for the fourth quarter for the fourth quarter of 2020, which accounted for an additional $5.1 million to total revenues.
And utilization to nudged up from 91% for <unk>.
Quarter, a year ago to 91.4% for this quarter.
Three vessels were indicted dry dock for scheduled surveys during the fourth quarter, taking a total of 88 days.
In total 14 vessels dry docked during the 12 months of 2021 at a total cost of $19.2 million.
The company did not have any other capital expenditure during 2021 and does not have any planned capital expenditure for 2022 other doesn't dry dockings.
Operating revenue from the pool was $8 3 million for the quarter, representing our share of the other participants revenues were.
Voyage expenses from the Luna pool of $6 $4 million, representing the other participants a share of our revenues from the point.
I'm currently our vessels had a net benefit of one point to $9 million from the pool, who joined the fourth quarter of 2021 compared to a $600000 deficit from the fourth quarter of 'twenty 'twenty.
Voyage expenses increased by $5 $4 million joined the quarter to $21.9 million principally as a result of the additional vessels in the fleet most of which are under voyage charters, thereby incurring these costs through voyage expenses.
And we see bunker costs, which formed part of voyage expenses, increasing dramatically as a result of the situation in Ukraine.
As there is concern about the shortage of oil globally as a result of possible energy sanctions against Russia.
Vessel operating expenses or Opex increased by 43.8% to $40.8 million for the fourth quarter all of which was a result of the additional vessels in the fleet.
The operating expenses per vessel per day actually reduced by $120 per day to $8000 per.
Are they higher vessel for the quarter compared to 8119 per vessel per day during the fourth quarter of 'twenty 'twenty.
I referred to impairment losses on vessels of $63 7 million at the beginning of my remarks this related to impairment of nine generally older vessels following a re.
Review in which we reduced the accounting estimated useful life of the vessels of all the vessels from part two years to 25 years as a result of future cash flows of these vessels could not support than carrying values of the nine vessels leading to this impairment loss.
As a result of shortening the estimated economic life of all the vessels in our fleet 25 years depreciation from Q1 2022 I E. This quarter were living and will increase to approximately $30.9 million from our current level of around $25.7 million per.
Water based on the existing fleet.
General and administrative costs.
Increased by $3 $9 billion to 10.3.
For the quarter ostensibly as a result of incorporating the G&A cost of ultra gossip $1.4 million severance cost of 1.1 million and one off legal and other costs associated with the ultra gas transaction of $1.3 million.
And finally other income being management fees earned from the other participant.
Our management of the Luna pool was $100000 for the quarter.
Interest expense for the fourth quarter was 10.7.
$7 million, an increase of 1.6 million or 18% in the fourth quarter of last year, all of which was as a result of interest on the additional debt taken on as part of the ultra gas transaction.
Net debt amounts to approximately 108 hundred $97 million and attracts interest at U S. LIBOR, which is subject to a fixed rate swap of around 2% plus a blank margin, which varies depending on the facility of between 1.9 and $2 six 5%.
Our share of results from the ethylene Marine export terminal was a profit of $6 $4 million for the quarter based on 241, and a half thousand tons of ethylene throughput charges.
In addition, depreciation for the terminal was 1.5 million, giving an EBITDA for the quarter from the terminal of $8 million.
On slide seven we've got the balance sheet, which is showing the company had a cash balance of <unk>.
$124 million at December 31st.
Part of $22 $9 million available from Undrawn revolving credit facilities associated with our secured vessel loans.
Our minimum liquidity covenant from our various bank loans and credit agreement is the maximum of $50 million.
Our total debt at December 31st was $932.8 million comprising.
Comprising of loan facility secured by our vessels of approximately.
$707 million.
The Sochi associated with the terminal of $54 4 million and two Norwegian bonds and aggregate amounting to $171 7 million.
One vessel alone.
As outlined on slide eight matures. This current year comprising of three six year old vessels in the amount of $50 million.
We are in the process of negotiating that with the refinancing of that facility as well as focusing on refinancing two other facilities that mature in the second half of next year 2023.
Earlier this year on January 14th we sold navigator Neptune, a 2000 built ethylene carrier for $21 million the vessel after the security under one of our outstanding Norwegian bonds and in accordance with the terms of that bond, we tendered enough for the net sale proceeds.
$26 million to those bondholders.
102% of par, but there were no acceptances and the bondholders, preferring instead to retain the bonds, which have a maturity of November 2023.
Consequently, the net proceeds from the sale of the vessels have been released to the company for general corporate purposes.
The company does have an existing call option on that bond redemption rate of 100 to 86, 4%.
And that's it for me.
Ill pass you over to <unk> for his remarks.
Thank you Niall and.
And good morning.
Everyone.
If you go to slide number 10.
During 2021 last year.
Our fleet safely reliably and efficiently delivered $5 6 million metric tons on behalf of our LPG petrochemicals and ammonia customers.
31% of this volume being the largest portion by far was <unk>.
Exported from North America.
And we anticipate this portion to increase this year however.
However, there will most likely be other changes.
In the near and medium term to our trade flows as a consequence of the restaurant in Ukraine conflict.
As you can see on the slide on the Pie chart, Ukraine. It's one of the largest exporters of ammonia with annual export volume of two and a half million metric tonnes.
This represents approximately 15% of global seaborne ammonia demand.
Following the Black sea port them, usually clothing international ammonia consumers will need to seek sourcing from other locations.
Which can have an impact on this thing to say in.
The world still needs. The ammonia is an input to put them through the production of FERC licenses for the agricultural industry.
Similarly, LPG is regularly exported from the Baltic Sea.
This is set to continue subject to laws and regulations we.
We do however expect that the volumes will decline over the next nine months in parallel with the Eu's target to reduce its Russian gas imports by two thirds by the end of the year.
Europe's demand for LPG, However remains in place and we expect sourcing to switch to other locations close to Europe , such as Algeria.
North America.
Yeah.
On page 11.
We can see navigators fourth quarter employment.
And you can see that is increasing both in LPG and petrochemical earnings space.
And utilization, peaking during the month of December at 95, 4%.
As we mentioned in the recent trade update our estimation of first quarter utilization remained above the 90% level.
February is typically a foster a month due to slowdown in activity, leading up to the lunar new year.
In addition for 2022 Chinese importers also limited buying demand during Beijing Winter Olympics following government restrictions curtailing production.
Yeah.
If you look at page 12.
Detailing the the rate environment, despite the step down in activity for February .
The rate environment for handy sized gas carriers.
Both ethylene capable semi refrigerated I'm fully refrigerated vessels.
Steady during the period larger fully refrigerated LPG carriers came off forever with little to no effect on the handy size assessment.
The very large gas carrier segment, that's wherever improved over the last week or so responding to consumers' securing LPG for energy demand.
In an uncertain environment.
If you move to page 13.
The global high cost of energy today.
Brent above $100 a barrel.
Significantly improves the competitiveness of North American natural gas liquids and its derivatives.
Well its north American ethane volumes exported on hand is five and medium sized gas carriers declined during January and February on the graph.
March is that nearly matched the record peak of December last year.
Ethane used as feedstock for the production of ethylene is far more cost effective against naphtha versus price after oil.
And therefore, the petrochemical producers are motivated to import as much ethane as they can possibly come through.
And that is a reflection of our expectation for March.
So just to give you. An example, we currently have one of our handy sized vessels carrying ethane from U S to China across the Pacific.
This is the trade that is typically only open for very large and medium sized ethane ships.
Due to the economies of scale.
And as indicated the tremendous value of U S ethane at this moment in time.
In the same vein ethylene exports.
Reduced during February .
Exports or have you ever dramatically up from March.
Which may actually be a historic record of ethylene exports from the United States of America of more than 120000 pounds.
Yeah.
And just to state the obvious navigate their benefits from increasing north American feed through exports.
Active wear is ethane or ethylene.
And both indications show that the demand is picking up for the month of March.
Going to page 14.
North American ethylene producers find themselves in a highly unique position.
The graph shows U S ethylene cash cost compared to other parts of the word.
In the current environment with the Brent above 100 barrels upon.
$100 barrel.
North American producers that are represented in the light blue color.
Well further to the left resulting in a significant competitive edge.
It strengthens our belief for sustained and continued ethylene exports.
To Europe and Asia.
Europe and Asia as represented in yellow and Green.
And are located mostly in the third and fourth quartile on that graph.
Therefore.
In a global environment of high energy prices high commodity prices North America will further strengthen its leadership in natural gas liquids.
And they're even through production and exports.
And navigate the reason a phenomenal position as the logistic provided to connect U S producers and midstream companies with international consumers.
And we are very much looking forward to setting new export records together with our partners in the coming months for this segment.
And with that I will hand, it back to the operator that can open for Q&A. Thank you.
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Oh, Hi, there, yes, Omar knocked that from Clarksons securities. Thank you.
Yeah, Hi, guys good morning, and good afternoon.
I don't know.
Nice to see the business, obviously firing on all cylinders in terms of the fleet performance and also the terminal.
Wanted to ask maybe you know as you highlighted it regarding the Russia exposure.
Uh huh.
Those four vessels that are on charter to the Russian counterparty.
Contracts are obviously still in force.
Become void at the attitude or the end.
Okay.
Thanks, Ed.
Are there any restrictions at the moment I guess in terms of where those ships are able to transit.
Kind of under the current sanction framework and are these at least going into Russian ports at the moment can you, maybe just discuss that a little bit.
Yes.
Thanks, Omar so clearly it is something that we are highly focused on.
With continuous monitoring of all sanctions so just to make be clear those ships than the existing charters comply with U S U K and EU sanction policies and regulation and that might change of course in.
In the contract, which is quite typical in very normal across the industry and not specific to navigator.
Sanction closes so it should something change it will give you the option to terminate if sanctions are either on the product or the counterpart now the counterpart for US is based in Austria.
Which is then in turn owned by <unk> Holdings are in Russia, and that company is not a.
Sanctioned and comprised with both U S U K and EU sanction policies as they are today should that change now that that will that will time will tell at the moment.
Its products, which is propane.
Is being bought by European consumers nothing to do with navigator, but European consumers are currently unrestricted in buying those products.
For the time being and the ports that we go to <unk>.
Still allowing our ships to call those born so.
Good question and it's a it's in flux and we're monitoring on an hourly minute basis.
Thank you for that.
That makes sense.
And I guess, you know it should the sanctions get more stringent and the contract become Boyd is there any concern that the charter just doesn't get back the ship is that a possibility or is that simply just a moot point considering you are actually operating the vessel.
Yeah.
Sorry, what was the question sorry online movie.
There is there is no chance that Omar.
<unk>, our crude by our crew.
And they are not used far far cabotage trade, meaning staying within any particular country. In this case in this case, Russia. So why are they to go to international where there was some suggestion that that might happen and they went into international waters. Then clearly we would direct the ship to go where we want to just go so somehow.
In essence.
Okay very good.
Thank you.
Got a few more questions, but I'll hop back in the queue and let.
Other else ask thanks, guys.
Omar.
Thank you we'll take our next question. Please go ahead caller your line is open.
Hey, guys. This is Sean Morgan, calling from Evercore.
So hey, how's it going so great production, obviously from the the ethylene terminal this quarter.
But just trying to understand.
Starting phase III for the rest of the year I mean, there's been so much volatility in terms of.
Production on a quarter to quarter basis. So should we be planning for is there seasonality. There should we be 0.8 per sort of fully ramped up you know high utilization once you get kind of past all these different operational issues that havent chillers in construction.
That start to steady out and do a constant stream or is there going to be a you know a fair amount of variability in the utilization of that terminal going forward.
Yeah, Hi, I'm sure Alright.
Alright.
For that one.
So the operational issues from a year ago in February 2021 are there.
Ironed out.
So the terminal itself.
The operational everything is working.
And then the question really.
Regarding the fundamental dynamics.
Thank you.
In production.
Attractiveness any market.
And I was speaking to our enterprise partners earlier this week.
Indications shows.
We illustrated on page 13.
That.
Mark.
Looking to be at least from our terminal.
Uh huh.
So we're looking at.
That's a record.
And in addition, you have export terminal.
Their commentary for April onward is very strong.
It's exactly what we talked about on page 14.
The unique position of America access of cheap ethane that will produce cheap ethylene.
And the rest of the World Europe and Asia.
Compared with.
We're using naphtha, which is highly prized.
It just makes absolute sense to crack.
Marcus ethylene and ethane you can pay it out of the United States of America.
The environment we're in.
I believe you'll be seeing strong numbers from the terminal or North America.
Okay, and Thats sort of given the current market, but so I guess, we can infer from that though it it's like in the three years from now I think it's a kind of more normalized.
Maybe crude prices have kind of settled into a more steady state and then utilization could cause kind of a dip from the sort of peak demand that we're seeing now.
But.
Right.
The terminal itself.
Was fully contracted.
This discussion to see we talked about this.
10%, 20% above nameplate capacity.
Our friends at enterprise have definitely show its capability to increase and crank up the.
Exports when needed.
So you have the base is formed.
100%.
A million tons per annum.
And then they have shown their capability.
Doing 20% more than that for peak demand.
Okay.
Alright, and then if I could just squeeze in one modeling question.
The rate on that 13 ships for the new ultra gas related facility I think you said it swapped out at 2%. So is that an all in fixed but you know effective fixed rate of 2% or is that 2% above above something some sort of like I know, it's fixed so like LIBOR doesn't apply but 2% just seems really low.
So I'm trying to understand what the appropriate rate is for that.
So fiber is fixed at 2%.
On top of that.
On top of that you have banks that are.
Between 1.9% two point decline.
Gotcha, Okay. So your yeah, all right so you're fixing the base rate and then the spread sulfides. Okay. Thanks that helps clear that up okay right right.
We will now take our next question. Please go ahead caller your line is open.
Hey, guys. This is Ben Nolan over at Stifel.
A couple of other follow once I did want to just clarify a little bit of where you're talking about.
With respect to Russia, not necessarily your your contracts with siebert, but.
When you when you are looking at whether it's the ammonia coming out of.
Ukraine or or the LPG coming out of Russia. It's your view that there's excess capacity elsewhere in the world such that are there.
There won't be necessarily fewer cargoes or less capacity of those products. It's just it'll it'll be produced elsewhere and probably go a longer distance is that.
Is that how you're thinking about it.
Interesting question, Ben So, let's try to go to basic.
Europe , Europe imported one and a half million tons of LPG from Russia last year.
350000 tons of and that was by sea and the rest was on rate.
Now so the largest portion of Russia supply of LPG to Europe is therefore reign.
Some of that will be restricted I am sure.
Largest portion of it.
And that's the amount we'll have to come from somewhere else and should the seaborne trade also stop then youre looking at a shortfall in Europe of one and a half million com.
Assume 2022 is the same as 2021.
Therefore, which I mentioned briefly.
All of our close proximity will kick in so where is this then that Europe can source that one and a half million part of whatever the shortfall is coming from.
And that is then Mediterranean they havent capacity, but the largest one as you know a new living in is the United States of America.
And the Trans Atlantic trade.
So there's a huge opportunity for North America to supply any shortfall of LPG that comes from this conflict for the European continent.
And if that is the case.
I think then that increases what Doug mentioned at the opening remarks.
Longer ton miles and then the question for what ships what vessels will be doing that well that will be a mix.
What I tried to point out that for navigators cargo shifted last year.
Less than 5% came from Russia, So should that go away.
It's only a small small part of the business, even Trinidad for boggle those bigger for navigator.
Anyway, that's a different topic.
Okay, No that's fair.
Helpful. I appreciate that.
Just switching gears for a moment you guys sold.
Two in which it was.
The 22 year old ship, but it is an ethylene carrier in.
In a market where clearly that's there there's a lot of tightness in ethylene carrier side, especially specifically on the handy sized.
Portion of the fleet.
Can you maybe talk through that a little bit.
What what's the thinking was behind that asset sale.
Hi, Ben.
I think it was probably two fold one.
Commercially and financially it is as you say, a 22 year old vessel and therefore, there is a timeline and I also mentioned we've revised our.
Albeit accounting estimates at economic life 25 years. So it's got three years of life.
If you look at any of the analysts the shipping analysts who are valuing the ship nobody value does that we're approaching 20.
$21 million. So it was a very good price and I guess thirdly.
The purchaser is a Chinese counterpart, who we understand is going.
Going to use the ship for their own purposes in or around China or at least at that side of the world. So it's not we do not believe that it is going to be competing with us.
On the business and the trades that we tend to operate on.
Okay.
Alright.
That sounds good I appreciate the color thanks, guys.
Thanks.
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Good morning, minimal leans on somebody misters edge.
Following up on the terminal you expect March throughput to be very strong and you also underline how higher oil prices increase the competitiveness of North American ethylene benefiting your term yet.
And I was wondering are you currently looking at increasing throughput capacity and if so what kind of timing would be looking at for the facility to come online.
Is that interesting question, which is very relevant in this environment.
Oh high commodity price high oil price definitely could.
U S ethylene exports in the boardrooms internationally for people, who had their business is to produce polyethylene or ethylene derivatives.
So the last two years of Covid.
And you know a depressed market arguably than that Hasnt really featured in People's minds, but now because the world has changed over the last few weeks.
Security of ethylene.
The state is definitely back on the agenda. So we will be working extremely hard and diligently with our partners to drum up interest.
Internationally for a possible expansion.
Absolutely.
Alright, that's very helpful.
You've been divesting the oldest portion of the fleet. After the merger, we will traverse and you're now also seating Furthermore, financial position would.
Could you provide some commentary on what your capital allocation priorities will be going forward.
Yeah.
Uh huh.
A good question too I think the first half.
Part of that would be debt reduction.
We would also be looking at other options alternative investments.
Investments.
And then considering a introducing a dividend or share buyback policy. That's obviously is a matter of subject for the board.
Which have have yet to consider that but.
That would not be unreasonable.
But certain circumstance certainly in the short term I mentioned, we've got a number of facilities.
Facilities coming up for maturity next year so.
So we would look at reducing some some of our debt in the initial phase.
Alright, that's fair. Thank you very much for taking my questions.
You're welcome.
Okay.
Thank you and we will now take our next question. Please go ahead quota you're right Nishu.
Okay.
Mr. Nolan your line is open.
Oh, sorry, I was muted sir.
Overstaying My welcome to the first time so.
I appreciate you taking another question for me.
The yeah, there had been some noise in the market over the last I don't know.
Three or four months.
You guys, having a partnership that was moving.
Possibly moving into the transportation of C O two.
I'm curious if you could frame that a little bit, but and then also has given everything that's going on in Russia, and energy prices or anything else.
Do you think maybe C O two carbon capture and the movement of that is sort of taken a little bit of a back seat to introduce security and that kind of thing and maybe maybe is being a little bit more slow played than it had been.
Yeah and expansive question so.
It's twofold, so you're correct, so Dan unity, which is C. G.
Joining venture between neutral GAAP and heavy gas to develop which is now navigator gas is to develop a C O two transportation services.
Before that though what the what they've done so far is to design.
A fully fledged yield to ship type with particular containment system that is needed to transport.
Two in our C O two supply chain.
There are a couple of projects and a lot of discussions going on in Europe across the Atlantic as well.
The possibility of logistics economics.
And practicality of that trade.
There is some public public projects in Denmark, specifically called Greensand projects, which is joint venture as a part of so it is definitely moving in the right direction and baby steps at the moment it could be something much bigger and the second part of your question.
This is a back seat at the moment I think quite the opposite so.
So if you read the news in Europe , and trying to reduce energy dependency of any other region.
Then environment, an alternative sourcing is coming big time, so in that scope Europeans will have to address the carbon issue that Europe has.
Among others and therefore, I think I don't think there's any stopping or reduction in interest in C. O two transportation quite the contrary.
Okay. That's helpful that was my only other question I appreciate it thank you.
Thank you there are no further questions at this time gentlemen.
Okay I would thank you all for attending our.
Fourth quarter earnings call and we will speak to you all again at the.
First quarter of 2022.
Thank you very much and goodbye.
Okay.
Thank you, ladies and gentlemen that does conclude your conference call for today. Thank you for participating and you may now disconnect.
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