Q1 2025 Capital Clean Energy Carriers Corp Earnings Call
Okay.
Operator: Thank you for standing by and welcome to the Capital Clean Energy Carrier Corps first quarter 2025 financial results conference call.
Thank you for standing by and welcome to the capital Clean energy carrier coal first quarter 2025.
Operator: We have with us Mr. Geri Kalogiratos, Chief Executive Officer, Mr. Brian Gallagher, Executive Vice President, Investor Relations, and Mr. Nikos Tripodakis, Chief Commercial Officer. At this time, all participants are in a listen-only mode. There'll be a presentation followed by a question and answer session, at which time, if you wish to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced.
Speaker Change: Actual results conference call, we have with US Mr. Jerry College of Arts Hall, Chief Executive Officer, Mr. Brian Gallagher Executive Vice President Investor Relations and Mr. Nikos took a Doc as chief commercial officer at this time all participants are in a listen only mode there'll be a presentation followed by a question and answer session at which time.
Speaker Change: If you wish to ask a question you will need to press star one on your telephone and wait for your name to be announced I must advise you that this conference is being recorded today Thursday may eight 2025.
Operator: I must advise you that this conference is being recorded today, Thursday, May 8th, 2025.
Operator: The statement in today's conference call that are not historical facts, including our expectations regarding acquisition, transactions, and their expected effect on us, cash generation, equity returns, and future debt levels, our ability to pursue growth opportunities, our expectations or objectives regarding future distribution amounts, all share buyback amounts, capital reserve amounts, Dividend coverage, future earnings, capital allocation, as well as our expectations regarding market fundamentals and the employment of our vessels, including re-delivery dates and charter rates, may be forward-looking statements as such, as defined in Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties that could cause the stated or forecasted results to be materially different from those anticipated.
Speaker Change: The statements in todays conference call that are not historical facts, including our expectations regarding acquisition transactions on that expected effect on us cash generation equity over time and future that levels, our ability to pursue growth opportunities our expectations or objectives regarding future distribution.
Speaker Change: All share buyback amount capital reserve amounts.
Speaker Change: Dividend coverage of future earnings capital allocation as well as our expectations regarding market fundamentals unemployment of all vessels, including with delivery dates on charter rates, maybe forward looking statements as such as defined in section 21 E of the Securities Exchange Act of 19.
Speaker Change: 34 as amended.
Speaker Change: These forward looking statements involve risks and uncertainties that could cause the stated or forecasted results to be materially different from those anticipated unless required by law, we expressly disclaim any obligation to update or revise any of these forward looking statements whether because of future events, you have information or change in our views.
Operator: Unless required by law, we expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations to conform to actual results or otherwise. We make no prediction or statement about the performance of our common shares.
Speaker Change: Or expectations to conform to actual results or otherwise, we make no prediction or statement about the performance of our common shares I would now like 10 days it to your first speaker today, Mr. Brian Gallagher. Please go ahead Sir.
Brian Gallagher: I would now like to hand over to your first speaker today, Mr. Brian Gallagher. Please go ahead, sir. Thank you, operator. Good morning and afternoon to whoever you are, and thank you for listening to the Capital Clean Energy Carriers Q1 2025 earnings call. As a reminder, we will be referring to the supporting slides available on our website as we go through today's presentation.
Brian Gallagher: Thank you operator.
Brian Gallagher: Good morning, and afternoon wherever you are and thank you for listening to the capital clean energy carriers Q1, 2025 earnings call.
Brian Gallagher: A reminder, we will be referring to the supporting slides available on our website as we go through todays presentation.
Brian Gallagher: Let's start then on slide four with the highlights. First quarter 2025 was an important quarter for the company in many respects. Firstly, net income from operations for the quarter amounted to just under $81 million, including a $46.2 million gain from the sale of two container vessels. This is included in the earnings release in our discontinued operation. These are the last two of the five 5,000 TEU containers that we agreed to sell last year and they were delivered to their new owners during this quarter. Overall, we have raised a total of $472.2 million in net proceeds from the sale of 12 container vessels since December 2023, and have recycled this capital into our focus on gas transportation assets.
Brian Gallagher: Let's start on slide four with the highlights.
Brian Gallagher: First quarter 2025.
Brian Gallagher: The company in many respects.
Brian Gallagher: Firstly net income from operations for the quarter amounted to just under $81 million, including a $46 2 million gain from the sale of two container vessels is included in the earnings release and our discontinued operations.
Brian Gallagher: These are the last two of the five 5000 Teu containers that we agreed to sell last year and.
Brian Gallagher: They were delivered to their new owners during this quarter.
Brian Gallagher: Overall, we have raised a total of $473 2 million in net proceeds from the side of the 12 container vessels since December 2023.
Brian Gallagher: Recycle this capital into our focus on gas transportation message.
Brian Gallagher: Another key development for the quarter is that we have secured employment for two of our new building LNG carriers for five and seven years respectively, both with an additional five-year option.
Brian Gallagher: Another key development in the quarter is that we have secured employment for two of our new building LNG carriers for five and seven days, respectively. Both with an additional five year option.
Brian Gallagher: My colleague Nikos will cover that in more detail later. What is more, during the first quarter of the year, the LNG carrier Axios II commenced its seven-year bare-boat charter, where the charter has the option to extend by an additional three years. The new charters, in addition to certain options exercised by one of our charters, have increased our firm charter backlog to $3.1 billion.
Brian Gallagher: My colleague Nicholas will cover that in more detail later.
Brian Gallagher: What is more during the first quarter of the year the LNG carrier.
Brian Gallagher: <unk> commenced its seven year bareboat charter, where the charter has the option to extend for an additional three years.
Brian Gallagher: The new charters in addition to certain options exercised by one of our charterers has increased term charter backlog to $3 $1 billion.
Brian Gallagher: We believe that these charters further corroborate our view on the positive fundamentals of the longer-term LNG shipping market and provide our investors visibility into both employment prospects and cash flows, well in advance of our first LNG new building delivery.
Brian Gallagher: We believe that these charters further cooperate op you on the positive fundamentals of the longer term LNG shipping market and provide our investors visibility to both the employment prospects and cash flows.
Brian Gallagher: Well in advance of our first LNG new building delivery.
Geri Kalogiratos: With that, I'll now turn it over to Chief Executive Gerry Kalogiratos and Nikos Tripodakis, our Chief Commercial Officer, for the remainder of the presentation. Thank you, Brian, and good morning to everyone listening in today. It has been indeed a very busy quarter across all fronts and is also reflected on our financials, which you will find on slides. As Brian pointed out, we derived a further $46 million in one-off gains this quarter from completing the sale of the last two out of the five container vessels we agreed to sell last year. We will continue to be opportunistic about the sale of the three remaining container vessels, as these are modern eco-vessels with long-term cash-flow attachments.
Jeremy: With that I'll now turn it over to Chief Executive Jeremy geologist and Nikos <unk> our.
Brian Gallagher: Our chief commercial officer, the remainder of the presentation.
Jeremy: Thank you, Brian and good morning to everyone listening in today. It has been indeed, a very busy quarter across all fronts and there is also reflected in our financials, which you'll find on slide six.
Jeremy: As Brian pointed out we derived a further $46 million in one off gains this quarter from completing the sale of the last two out of the five container vessels, we agreed to sell last year.
Jeremy: We will continue to be opportunistic about the sale of the three year remaining container vessels. As these are modern eco vessels with long term cash flow attached.
Geri Kalogiratos: The dividend, as we discussed on the last call, is a core component of the company's value proposition to shareholders and making this quarter the 72nd consecutive quarter that the company has paid a cash dividend. Turning to slide seven, we can see that our capital base continues to consolidate and we await the next schedule of ships to be delivered next year. Our cash position continues to be solid, supported by the completion of two further container sales, bringing total cash to $420 million. With a great deal of uncertainty and volatility injected into capital markets in recent months, money markets continue to factor in almost 100 basis points in interest rate cuts by the Fed during 2025, and we take this opportunity to remind investors that CCC could be a beneficiary of such a move, given 80% of our funding is on floating rates.
Jeremy: The dividend as we discussed on the last call is a core component of the company's value proposition to shareholders and making this quarter the 72nd consecutive quarter that the company has paid a cash dividend.
Jeremy: Turning to slide seven we can.
Jeremy: Let's see that our capital base continues to consolidate and we await the next schedule of ships to be delivered next year.
Jeremy: Our cash position continues to be solid supported by the completion of two further container sales, bringing total cash to $420 million.
Jeremy: With a great deal of uncertainty or volatility injected into capital markets in recent months money markets continue to factor in almost 100 basis points and interest rate cuts by the fed during 2025 and.
Jeremy: And we take this opportunity to remind investors that <unk> will be a beneficiary of such a move given 80% of our funding these are floating rates.
Geri Kalogiratos: Finally, our balance sheet is strong, which is important within the business we operate, but the main development for this quarter is a reduction of our open LNG carrier exposure by one-third, enhancing the contract length of our existing LNG chapter. We expect these developments to further enhance our financial flexibility.
Jeremy: Finally, our balance sheet is strong which is important within the business we operate but the main development for this quarter is the reduction of our <unk> and LNG carrier exposure by one third.
Jeremy: Hansen the contract flex of our existing LNG charter book.
Jeremy: We expect these developments to further enhance our financial flexibility.
Geri Kalogiratos: I will now turn to the more strategic matters on slide 9. Our average charter duration now stands at 7.3 years across the fleet with our LNG fleet showcasing a charter backlog of 91 years or 2.8 billion of contract revenue. As you can see at the bottom of the schedule, two of our six LNG carriers under construction have now been placed on an energy supermajor for five and seven years respectively, with options to extend both charters by further five years. This is in addition to certain options exercised by one of our charters for three existing vests.
Jeremy: I will now turn to the more strategic matters on slide nine.
Jeremy: Our average charter duration now stands at seven three years across the fleet with our LNG fleet showcasing a charter backlog of 91 years or $2 8 billion of contracted revenue.
Jeremy: As you can see at the bottom of the schedule two of our six LNG carriers under construction have now been placed on energy Supermajor for five and seven years, respectively with options to extend both charters by a further five years.
Jeremy: This is in addition to certain options exercised by one of our charters for three existing vessels.
Geri Kalogiratos: This translates into an average daily time charter equivalent for our fleet across the firm charters of approximately 87,300 or 91,150 that is per day including all options.
Jeremy: This translates into an average daily time charter equivalent for our fleet across the firm charters of approximately 87300 <unk>.
Jeremy: Or 91160.
Jeremy: That is per day, including all options.
Geri Kalogiratos: In summary, our charter book continues to expand as we work towards fixing term employment for the remaining assets in our fleet.
Jeremy: In summary, our charter book continues to expand as we work towards fixing derm employment for the remaining assets in our fleet.
Geri Kalogiratos: Turning now to slide 10, I'm looking at the contracted revenue base in more detail. The impact of these charter extensions and the two new charters has boosted our total contracted backlog, including our container vessels, to 3.1 billion or 4.5 billion, should all options be exercised. The pie chart illustrates the breakdown of our total time charter ending u base using the firm charter period.
Jeremy: Turning now to slide 10, and looking at the contracted revenue base in more detail.
Jeremy: Okay.
Jeremy: The impact of this charter extensions in the two year charters has boosted our total contracted backlog, including our container vessels to $3 1 billion or $4 5 billion should all options be exercised.
Jeremy: The Pie chart illustrates the breakdown of our total time charter revenue base using the firm charter periods.
Geri Kalogiratos: This remains a core strength of our proposition as a company, that is counterparty diversity. You will notice a slight departure from earlier presentations where we included the names of all our counterparties. As our counterparties in Greece and also in an effort to preserve confidentiality of certain commercial agreements, we have moved this to a more simplified form. It is important to highlight here that in the energy shipping industry, charters are typically super majors and other national or international energy companies, utilities, traders, and the production plant operators with high credit credentials. Overall, when it comes to CCC, no single counterparty represents more than 20% of the $3.1 billion contract revenue bucket.
Jeremy: This remains a core strength of our position as a company that is counterparty diversity.
Jeremy: You will notice a slight departure from earlier presentations, where we included the names of all of our Counterparties.
Jeremy: As our Counterparties increase and also in an effort to preserve confidentiality of certain commercial agreements. We have moved this to a more simplified format.
Jeremy: It is important to highlight here that in the LNG shipping industry charters are typically super majors, and other national or international energy companies utility Strangers via protection plant operators with high credit credentials.
Jeremy: Overall when it comes to CCC no single counterparty represents more than 20% of the $3 1 billion contracted revenue backlog.
Geri Kalogiratos: This diversity provides the company with a very strong framework to build our gas transportation portfolio further with a mix of existing corporate relationships and new customers.
Jeremy: This diversity provides a couple into very strong framework to build our gas transportation portfolio creditor with a mix of existing corporate relationships and new customers.
Geri Kalogiratos: I will finish off this section now with a quick look at our new building CAPEX program and our expectations with regard to its financing, described with more detail on slide 11. So we ended the quarter with $420 million of cash on our balance sheet, which provides a solid buffer for the business. Clearly, a recent contract wins and option declarations, as we have stated previously, give us further financial flexibility. From our new building program of $2.3 billion underway, we have already paid advances by quarter ends to the tune of $467 billion. assuming we finance 70% of the acquisition price with the LNG carriers and 60% of the other gas vessels, with debts amounting to approximately $1 billion.
Jeremy: I will finish off this section now a quick look at our new building Capex program and our expectations with regard to its financing described with more detail on slide 11.
Jeremy: Okay.
Jeremy: So we ended the quarter with $420 million of cash on our balance sheet, which provides a solid buffer for the business clearly a recent contract win.
Jeremy: We incent option Declaration is as we have stated previously give us further financial flexibility.
Jeremy: From our new building program of $2 3 billion underway, we have already already made advances by quarter ends to the tune of $467 million.
Jeremy: Assuming we financed 70% of the acquisition price of the LNG carriers at 60% of the gas vessels, which debt amounting to approximately $1 billion.
Geri Kalogiratos: 560 million. That would leave us with an excess equity of 105 million as slide 11 shows. That is, without taking into account cash flow generation from our existing fleet.
Jeremy: $560 million that would leave us with an excess equity of $105 million. A slide 11 shows that is without taking into account password generation from our existing fleet.
Nikos Tripodakis: I would like to turn now to our Chief Commercial Officer, Nikos Tripodakis, who will run through our LNG market slides.
Jeremy: Yes.
Nicole: I would like to turn now to our Chief commercial Officer, Nicole <unk>, who will run through our LNG market slides will be available to answer your questions at the end of the call Nicholas overdue.
Nikos Tripodakis: I will be available to answer your questions at the end of the call.
Nikos Tripodakis: Nikos, over to you. Thank you, Jerry, and good morning or afternoon, everybody.
Speaker Change: Thank you Jerry and good morning or afternoon everybody.
Nikos Tripodakis: There are two important issues to deal before I move on to the market-focused commentary on LNG. Firstly, the effect of the U.S. trade representatives' recently announced port fees. These are the fees that the new Trump administration has proposed to be levied on ships entering U.S. ports and which have been substantially reduced in their potential impacts. from the original proposal. As far as LNG shipping is concerned, we expect a minimum impact. The U.S. is targeting a rising percentage of U.S. LNG exports to be transported on U.S. flagged, operated, or built LNG carriers from 2028 onwards, and until then, LNG shipping is exempted from any such levy.
Speaker Change: There are two important issues of daily before I move on to the market focused commentary on LNG. Firstly the effects of the U S. Trade representative has recently announced port fees. These are the fees that the new Trump administration has proposed to be levied on ships entering U S ports, and which have been substantially reduced and their potential impacts.
Speaker Change: From the original proposals.
Speaker Change: As far as LNG shipping is concern we expect minimum impact.
Speaker Change: In the U S is targeting a rising percentage of U S. LNG exports to be transported in U S flag operated or build LNG carriers from 2028 onwards and until event.
Speaker Change: LNG shipping is exempted from any such levels in.
Nikos Tripodakis: In any case, CCC is heavily insulated against this development as none of our LNG fleet on the water was built in China and none of our six LNG carriers under construction are being built in China either. Moreover, we view any theoretical suspension of LNG export licenses as a low-probability scenario, and the exact mechanisms of such suspensions still unclear.
Speaker Change: In any case, she cec's heavily insulated against this development.
Speaker Change: One of our LNG fleet on the water was building, China and none of our six LNG carriers under construction.
Speaker Change: <unk> billion, China either.
Speaker Change: Moreover, we view any theoretical suspension of LNG export licenses are the low probability scenario with the exact mechanism such as pension still unclear.
Nikos Tripodakis: So as far as the effects of USTR port fees are concerned, in our view, our business model is unaffected for now, but we will, of course, continue to closely monitor any developments.
Speaker Change: So as far as the effects of USD four trees are concerned in our view of our business model is unaffected for now, but we will of course continue to closely monitor any developments.
Nikos Tripodakis: Moving on to the impact of tariffs. As slide 14 shows, it is perhaps counterintuitive for the US, the largest LNG exporter, and China, the world's biggest importer, to have little direct LNG traffic between them. However, this has been increasingly the case, as the graph on the left hand side shows. Indeed, there have been no direct cargo from the US to China since February, and trade has been modest in recent years between the two nations.
Speaker Change: Moving on to the impact of tariffs as slide 14 shows because perhaps counterintuitive for the U S. The largest LNG exposure in China, the world's biggest importer to have little direct LNG traffic between them. However, this has been increasingly the case as the graph on the left hand side shows indeed, there have been no direct cargo.
Speaker Change: From the U S to China since February and trade has been modest in recent years between the two nations.
Nikos Tripodakis: We summarize our thoughts on the medium and longer-term potential impacts from tariffs on the right-hand side of slide 14. A positive development in this situation could be the signing of bilateral agreements between the U.S. and other nations with the aim to alleviate tariffs and balance the trade deficit with the U.S. More sale and purchase agreements for the US LNG project will facilitate new final investment decisions and as such significantly boost demand for LNG freight. A potential headwind if tariffs persist, however, could be the rising cost of the energy project looking to reach that FID. The financing, operational and capital funding costs for U.S.
Speaker Change: To summarize our thoughts on the medium and longer term potential impacts from tariffs on the right hand side of slide 14.
Speaker Change: A positive development from differentiation can be the signing of bilateral agreements between the U S and other nations will be aimed to alleviate guidance and balance of trade deficit with U S.
Speaker Change: More of a sale and purchase agreement from the U S for U S. LNG projects will facilitate new final investment decisions and not such significantly boost demand for LNG.
Speaker Change: A potential headwind in the Scottish persist however, could it be the rising cost of LNG project looking to reach that.
Speaker Change: The financing operational and capital funding cost for U S projects have reasons since the pandemic and the effect of products is likely to further increase this cost that potentially may AFI.
Nikos Tripodakis: projects have risen since the pandemic and the effect of tariffs is likely to further increase these costs and potentially delay FID. This remains a fast-moving, complicated, and very important issue, and we will be looking to update investors going forward.
Speaker Change: It is this.
Speaker Change: This remains a fast moving complicated and very important issue and we will be looking to update investors going forward.
Nikos Tripodakis: Turning now to the energy market itself.
Speaker Change: Turning now to the LNG market itself.
Nikos Tripodakis: On slide 15 we have highlighted three key areas. Point number one illustrates that new building prices remain firm. There was a single order for an LNG vessel during coup one for a reported price north of 260 million dollars. Prices for new buildings have been above $250 million since February 2023, according to brokers, and have not been affected by the weakness in the sports market throughout 2024 and 2025. This trend is now further expected to increase due to Trump's regulatory release for U.S. energy projects on the one hand and port fees on Chinese-built ships on the other.
Speaker Change: Okay.
Speaker Change: On slide 15, we have highlighted three key areas number.
Number one illustrates that new building prices remain firm.
Speaker Change: There was a single order for an LNG vessel during Q1.
Speaker Change: <unk> price north of $260 million.
Speaker Change: Prices for new buildings have been above $250 million since February 2023, According to brokers and have not been affected by the weakness in the spot market throughout 2024 and 2025.
Speaker Change: This trend is now further expected to increase due to Trump's regulatory release for U S. LNG projects on the one hand and port fees I'm Chinese built ships on the outcome.
Nikos Tripodakis: On the first point, we have seen multiple new sale and purchase agreements signed since the beginning of the year, as well as the first final investment decision since 2023 from Woodside on the 16.5 million tons per annum Louisiana LNG project. On the second point, the U.S. trade representative has imposed port fees on Chinese-built vessels, is expected to increase demand for Korean-built vessels, and as such, strengthen new building prices further.
Speaker Change: On the first point, we have seen multiple new sale and purchase agreement signed since the beginning of the year as well as the first final investment decision since 2023 from one side on the $16 5 million tonnes per annum, Louisiana LNG project.
Speaker Change: On the second point the U S trade representative has imposed Portuguese and Chinese built vessels is expected to increase demand for Korean beauty vessels and as such strengthened new building prices further.
Nikos Tripodakis: Point number two on the graph on the slide 15 illustrates that the longer-term time charted market has remained almost immune from the volatility and largely downward movement in spot rates over the past 12 to 18 months. Ten-year rates remain in the high 80s to low 90s range. As with the strength of new building prices, long-term rates continue to reflect the fact that despite the weakness in the front of the curve, the energy shipping market has and continues to be short modern tonnage from 2026 and 2027 only.
Speaker Change: Point number two.
Speaker Change: On slide 15 illustrates that the longer term time, Mark time charter market has remained almost immune from the volatility and largely downward movement in spot rates over the past 12 to 18 months.
Speaker Change: 10 year rates remain in the high Eighty's prolong nike's range as with the strength in new building prices long term rates continue to reflect the fact that despite the weakness in the front of the curve. The LNG shipping market has and continues to be short modern tonnage from 2026 and 2027 onwards.
Nikos Tripodakis: Lastly, point number three shows how short-term time charter rates have been recovering from the lows we have seen in January. While the scale of this chart does not illustrate the scale of this recovery, spot rates have increased by around 300% from below 10k per day in January to around 40,000 per day at the end of April. This recovery has been a combination of an increase in spot requirements throughout the first quarter, windows of open arbitrage to Asia, which removed shipping length in the Atlantic Basin, as vessels repositioned east, and also reduced appetite from charters to rely on their own tonnage.
Speaker Change: Fluffy point number three shows how short term time charter rates have been recovering from the lows. We have seen in January wireless carriers charter to help illustrate the scale of this recovery spot rates have increased by around 300% from below 10-K per day in January to around 40000 per day.
Speaker Change: The end of April this recovery has been a combination of an increase in spot requirements throughout the first quarter windows of Vulcan arbitrage to Asia, which removes shipping length in the Atlantic Basin as vessels repositioned East and also.
Speaker Change: <unk> appetite from charters to reflect their own tonnage and finally as illustrated in the next chart an increase in the number of idle steam and tried to your investments.
Nikos Tripodakis: And finally, as is illustrated in the next chart, an increase in the number of idle steam and trash fuel vessels.
Nikos Tripodakis: Looking now at slide 16. we can see the energy carrier vessel supply dynamics. Slide 16 illustrates the effects that the weakness in the current spot market has had on older tonnage, and how operators of such tonnage are responding to the low charter rate environment. On the left-hand side, you can see the percentage of idle steam and tri-fuel vessels, with idle being defined as vessels being static for 14 days or longer. It is clear that there has been a steep increase in the percentage of idling vessels throughout the past year, as the percentage of both idling steam and tri-fuel vessels is currently the highest it has been over the past five years for both vessel types.
Speaker Change: Looking at our slide 16.
Speaker Change: We can see the LNG vessel supply dynamics.
Speaker Change: Slide 16 illustrates the effect that the weakness in the current spot market has had an older tonnage and how operators of such tonnage of responding to the low charter rate environment.
Speaker Change: On the left hand side, you can see the percentage, providing steam and tri fuel vessels with idle being defined as vessels being static for 14 days or longer.
Speaker Change: It does appear that there hasnt been a steep increase in the percentage of violin vessels throughout the past year as a percentage of both <unk> and try to your vessels is currently the highest it has been over the past five years for both vessel types.
Nikos Tripodakis: According to market analysts, at the end of Q1 2025, the number of idle steam vessels reached 41, up from 19 in Q3 2024, while 18 tri-fuel vessels were idle at the end of Q1 2025, from only 2 in Q3 2024.
Speaker Change: According to market analysts at the end of Q1 2025, the number of widely extreme vessels reached 41 up from 19 in Q3 2024, while 18 Tri fuel vessels were idle at the end of Q1 'twenty five from only two in Q3 2024.
Nikos Tripodakis: Moreover, there are some interesting points around scrapping, as we can see on the chart on the right-hand side. Firstly, whilst relatively small in absolute number, 2024 saw a record number of LNG vessels being scrapped. Secondly, Q1 2025 has already seen the highest number of scrapping of any quarter, with three vessels sold for demolition, a number that, if annualized, would mean that 12 LNG vessels will exit the fleet, which is a 50% increase from the previous record year.
Speaker Change: Moreover, there are some interesting points around scrapping as we can see on the chart on the right hand chart.
Speaker Change: Firstly.
Speaker Change: Relatively small in absolute number 2024, so a record number of LNG vessels being scrapped.
Speaker Change: Currently Q1, 2025 has already seen the highest number of scrapping of any quarter with three vessels sold for demolition a number that if annualized would mean the 12 LNG vessels will exit the fleet, which is a 50% increase from the previous record year.
Nikos Tripodakis: In conclusion, the combination of record-high idling and scrapping of older vessels supports our view that in the current energy market, where large, efficient, and regulation-compliant vessels are required, there is limited room for older ships.
Speaker Change: In conclusion, the combination of record high idling and scrapping of older vessels supports our view that in the current energy market.
Speaker Change: Large efficient and regulation compliant vessels are required there is limited room for older ships.
Nikos Tripodakis: Moving over to slide 17, we can see what is, in our view, a relatively neutral approach to the energy shipping supply and demand balance projection. The approach in this chart is holistic, aiming to consider all parameters that affect both the supply and the demand side. The basic premise under this analysis is that only projects that have reached FIV are considered on the demand side, and only vessels that are on order are considered for the supply side. With relatively conservative assumptions around vessel scrapping and ton-mile demand, both in terms of east-west arbitrage and transiting through Suez, we can see that towards the end of 2026 and the very beginning of 2027, the market is balanced.
Speaker Change: Moving over to slide 17, we can see what is in our view are relatively neutral approach to the LNG shipping supply and demand balance projections.
Speaker Change: The approach in these charges domestic aiming to consider all parameters that affect both the supply and the demand side. The basic premise under this analysis is that only projects that have reached if idea considered on the demand side and only vessels on order are considered for the supply side.
Speaker Change: With relatively conservative assumptions around vessel scrapping and ton mile demand both in terms of east West arbitrage and transiting through Suez, we can see that towards the end of 2026 and the very beginning of 2027 the market rebalancing.
Nikos Tripodakis: From Q1 2028, the market becomes significantly short of modern tonnage, with a deficit reaching approximately 100 vessels by 2029, once we add the recent FID on wood sites in Louisiana and L.A. This deficit could widen even further by 2029 to 2030 if we consider the circa 80 million tons per annum of pre-FID project and the fact that there is limited yard capacity available, especially until 2030.
Speaker Change: From Q1 2028, the market it becomes significantly short modern tonnage with a deficit reaching approximately 100 vessels by 2029 once we have the recent.
Speaker Change: On <unk>, having J D.
Speaker Change: This is exited could widen even further by 2029 to 2000 2030, if we considered the circa 80 million tons per annum of <unk> project and the fact that there is limited yard capacity available, especially markets like a third.
Nikos Tripodakis: As we all know, this analysis is multibody and can be affected by many parameters. However, it is a strong view that there is significant upside from this base case.
Speaker Change: As we all know this analysis is multifaceted and can be affected by many parameters. However, it is our strong view that there is significant upside from this base case as an example for this if the proportion of U S. LNG delivered to Asia. Instead of your Europe increases by just 10% everything else can be analysis being equal in the market with <unk>.
Nikos Tripodakis: As an example for this, if the proportion of US LNG delivered to Asia instead of Europe increases by just 10%, everything else in the analysis being equal, then the market would rebalance more than a year earlier in Q1 2026.
Speaker Change: Balanced more than a year earlier in Q1 2026.
Geri Kalogiratos: Thank you, everybody, and I will now turn it back to Jay for the summary. Thank you, Nikos. Moving to slide 19.
Jay: Thank you everybody and I will now turn it back to Jay for the summary.
Speaker Change: Okay.
Jay: Thank you Nicholas moving to slide 19, I firmly believe that the progress.
Geri Kalogiratos: I firmly believe that the progress made during the reported quarter in solidifying our existing charter book and placing two new medium term charters with a new high quality customer further improves the company outlook and visibility for our shareholders. On the remaining LNG carriers, we have an order that will continue to be opportunistic about fixing long-term employment, as there are increasingly fewer uncommitted LNG new buildings available at this time, when we see growing activity in the LNG industry with both new SPAs being signed and FIVs being taken, as Nikos described earlier. We're also engaged in constructive discussions on the rest of our gas vessels, recognizing, however, that these will be employed into a more shorter term market.
Jay: The reported quarter solidifying our existing charter book in place in two new medium term charters with a new high quality customer further improves the company outlook and visibility for our shareholders.
Jay: On the remaining LNG carriers to have an order we will continue to be opportunistic about fixing long term employment as they are increasingly pure uncommitted LNG new buildings available.
Jay: At this time.
Jay: We see growing activity in the LNG industry, which both new SBA <unk> selling and <unk> taken a sneakers described earlier.
We're also engaged in constructive discussions from the rest of our gas vessels.
Jay: Organizing however that these will be employed into a more shorter term market and was more likely than not when we would be able to provide deployment updates.
Geri Kalogiratos: And it is more likely than not that we will be able to provide employment updates for the closer to their delivery.
Jay: Closer to their delivery.
Geri Kalogiratos: The few remaining container vessels are well underpinned on long-term contracts, potentially out to the end of the next decade, but provide optionality for CCEC going forward.
Jay: The two remaining container vessels are well underpinned on long term contracts potentially out to the end of the next decade. It provides optionality for CCC going forwards.
Geri Kalogiratos: Now turning to the last slide in the deck. Capital Clean Energy Carriers has continued to deliver on the objectives we set out and the scale of the delivery has been strong for this quarter. Our LNG charter book has increased further. We de-risk a third of our LNG order book by securing employment for two of our vessels, while retaining optionality with three containers on fleet and with a strong balance, which includes over $420 million of cap. Importantly, this company has and will continue to have going forward a very young fleet, delivering the lowest unit rate cost possible today to our customers.
Jay: Now turning to the last slide in the deck.
Jay: <unk> clean energy carriers has continued to deliver on the objectives, we set out and the scale of our delivery has been strong for this quarter.
Jay: Our LNG charter book has increased rather we derisk a third of our LNG order book by securing employment for two of our vessels, while we retain optionality with three containers, our fleet and with a strong balance sheet, which includes over $420 million of cash.
Jay: Importantly, this company has and will continue to have going forward, a very young fleet delivering the lowest unit rate cost possible today to our customer.
Geri Kalogiratos: with the lowest environmental footprint, both critical aspects to success given the commercial requirements of our customers and the emerging regulatory environment when it comes to carbon and methane emissions. Looking forward, CCC is expected to control the largest LNG 2-stroke carrier fleet available to investors upon delivery, in addition to the other 10 multi-gas vessels. The company has considerable contract coverage of over seven years already and strong visibility on cash flows while we believe that we have an advantage over many of our peers in only being invested in the latest gas technology vessels with fewer fuel availability.
Jay: With the lowest environmental footprint.
Jay: Those critical aspects to success given the commercial requirements of our customers on the emerging regulatory environment when it comes to carbon and methane emissions.
Jay: Looking forward CCC is expected to control the largest LNG to stroke carrier fleet available to investors upon delivery. In addition to the other 10 multi gas vessels.
Jay: The company has considerable contract coverage of over seven years already a strong visibility on cash flows while we believe that we have an advantage over many of our peers.
Jay: Only being invested in the latest gas technology vessels with your fuel capabilities.
Geri Kalogiratos: However, we are not satisfied or tempted to rest.
Jay: However, we are not satisfied or inventory, we need to address the deployment of our LPG and liquid show two portfolio that will start delivering early next year.
Geri Kalogiratos: We need to address the deployment of our LPG and liquid CO2 portfolio that we'll start delivering early next year. We need to continue to raise the profile and recognition of the company in capital markets and gain traction with investors. So plenty of work to do, but the first quarter shows what the company is capable of on our growth trajectory.
Jay: We need to continue to raise the profile of recognition of the company's capital markets and gain traction with investors. So plenty of work to do but the first quarter shows what the companys capable.
Jay: Often our growth project trajectory.
Operator: With that, I will now pass it back to the operator for questions. Thank you.
Jay: With that I will now pass it back to the operator for questions.
Operator: To ask a question you will need to press star 1 and 1 on your telephone and wait for your name to be announced.
Jay: Thank you Tom.
Jay: I'll ask a question press star one on one on your telephone.
Operator: To withdraw your question please press star 1 and 1 again.
Speaker Change: Name to be announced so Joe Your question. Please press star one on one again.
Operator: We will now go to our first question. One moment, please.
Jay: We will now go to the first question.
Speaker Change: One moment please.
John Chappell: And your first question comes from the line of John Chappell from Evercore. Please go ahead. Thank you.
Speaker Change: And your first question comes from the line of Jon Chappell.
Jon Chappell: Evercore. Please go ahead.
Geri Kalogiratos: Good afternoon, Jerry. Hi, John.
Jon Chappell: Thank you good afternoon Jerry.
Jon Chappell: Hi, Jonathan.
Geri Kalogiratos: So, first question is on the CapEx schedule. It looks like about $486 million that was pegged for 1Q26 has been shifted about half to 3Q26 and half to 1Q27. Is that your choice, you know, based on kind of chartering opportunities, or was that something from the shipyard or maybe even the financing side?
So first question is on the Capex schedule.
Jon Chappell: It looks like about 486 million that was pegged for <unk> 26 has been shifted about half to <unk> 26, and <unk> 27.
Jon Chappell: Is that your choice.
Jon Chappell: Based on kind of chartering opportunities or was that something from the shipyard or maybe even the financing side.
Geri Kalogiratos: John, very well spotted. We have been able, with our partners, to adjust some of our CAPEX and operational scheduling, which we have reflected in the CAPEX schedule we provide every quarter. It was some optionality that we had arranged with our partners, the shipbuilder, at a minimal cost. And this, together with the charter opportunities we see in the market and the flexibility that we have in deploying these assets, has been a very valuable tool. So we decided to sweep some of the deliveries by a few quarters.
Jon Chappell: Okay.
Jon Chappell: Yes.
Jon Chappell: Doing very well it's positive.
Jon Chappell: We have been able with our partners to adjust some of our Capex center operational scheduling.
Jon Chappell: At which we have reflected in the.
Jon Chappell: Our capex schedule, we provide every quarter.
Jon Chappell: It was some optionality.
Jon Chappell: We had.
Jon Chappell: Our range with our.
Jon Chappell: But partners.
Jon Chappell: The shipbuilder.
Jon Chappell: At.
Jon Chappell: Minimal cost.
Jon Chappell: This.
Jon Chappell: Together with the charter opportunities, we see in the market and the flexibility that we have.
Jon Chappell: <unk>.
Jon Chappell: Deploying these assets.
Is has been a very valuable tool, so we decided to switch sweep.
Jon Chappell: Some of the deliveries.
Jon Chappell: By a few quarters.
Geri Kalogiratos: Okay, thanks.
Geri Kalogiratos: And then on the gas carriers, I understand that we're going to have to wait to get closer to delivery to have a better idea, but maybe you can just help us understand how the discussions are going at this point.
Jon Chappell: Okay. Thanks.
Jon Chappell: And then on the gas carriers I understand separately have to wait to get closer to delivery to have a better idea, but maybe you can just help us understand how the discussions are going at this point some of the.
Geri Kalogiratos: Some of the potential liquids that could be carried are relatively new markets, unestablished. You know, what are these conversations that you've had so far? And is there a rough kind of target at this point, understanding we're still maybe 12 months away to kind of think about from either duration or a type of rate perspective?
Jon Chappell: The potential liquids that could be carried or relatively new markets on established.
What are these conversations that you've had so far and is there a rough kind of target at this point understanding we're still maybe 12 months away.
Jon Chappell: Think about from either duration or a type of rate perspective.
Geri Kalogiratos: So, as we discussed a couple of quarters ago, when we went through the, I'll start with the liquid CO2 carriers, the handy, the handy vessels, right? So, as we discussed a couple of quarters ago, there is a lot of activity on the front of the movement of liquid CO2 and the number of projects. Some of them have taken FID. and we have already an operational project, Northern Lights, but the timeline of most of these projects is from 2028-2029. So our current discussions around the four liquid CO2 carriers which are effectively a semi-ref, handy size, multi-gas vessel that can carry LPG as well as ammonium and other cargoes and in addition of course to liquid CO2 is have been around either large companies that have different types of gas volumes, including grey as well as low carbon ammonia, LPG, and are also involved in the liquid CO2 supply chains.
Jon Chappell: So as we discussed a couple of quarters ago. When we went through the I'll start with the liquid share two carriers the handy.
Jon Chappell: At one hand divestments right. So as we discussed a couple of quarters ago.
Jon Chappell: There is a lot of activity.
Jon Chappell: On the product.
Jon Chappell: The movement of liquid share too on the number of projects some of them have taken if I D.
Jon Chappell: And we have already an operational project northern lights, but the timeline of most of these.
Jon Chappell: Projects is from 2000 22029 onwards.
Jon Chappell: So our direct discussions around the four.
Jon Chappell: Liquid share two carriers, which are effectively.
Jon Chappell: Semi ref.
Jon Chappell: And the size.
Jon Chappell: Multi gas vessels that can carry LPG as well as <unk>.
Jon Chappell: And other cargos.
Jon Chappell: In addition of course liquid show too is.
Jon Chappell: <unk> has been around either.
Jon Chappell: Large companies that have.
Jon Chappell: Different types of gas volumes, including.
Jon Chappell: As well as no carpet number one.
Jon Chappell: LPG.
Jon Chappell: Our also.
Jon Chappell: Both the Eden.
Jon Chappell: Liquid share to supply chains. So some of these guys.
Geri Kalogiratos: So some of these guys, they are interested in taking vessels like this for three to five years and be able to deploy them across their logistic needs. But I think also you have the more, if you want, normal LPG and ammonia business that would be very much interested in vessels like that. Semiref vessels is extremely small. Actually, we control a very big part of it, and we see good interest also for these vessels in the, let's say, sport quote-unquote, right, because this is more a short-to-see market, so one-to-three-year type of charters. Usually, this type of demand, where you see most of the bids, will become more active much closer to delivery.
Jon Chappell: Interested in taking vessels like this for three to five years and be able to deploy them across.
Jon Chappell: <unk>.
Jon Chappell: Yes.
Jon Chappell: Logistic needs.
Jon Chappell: But I think also you have the more.
Jon Chappell: If you want.
Jon Chappell: Normal LPG and ammonia business.
Jon Chappell: Wood.
Jon Chappell: That would be very much interested investors like that.
Jon Chappell: The order book for Hanmi size.
Jon Chappell: MS semi ref vessels is extremely small actually we control a very big part of it.
Jon Chappell: And we see good interest also for these vessels in the let's say spot quote unquote right. Because this is more of it.
Jon Chappell: Historically <unk> market.
Jon Chappell: So one to three year type of charters.
Jon Chappell: Usually this type of.
Jon Chappell: Demand, whereas what youll see most of the beat.
Jon Chappell: Is it will become more active much closer to delivery so multiple die in those.
Geri Kalogiratos: So, multiple lines of inquiries, but I think the default would be to trade them as effectively hand-designed LPG ammonia carriers. Got it.
Jon Chappell: Lines of inquiries, but I think the default would be to trade them.
Jon Chappell: Effectively handy sized LPG carriers.
Geri Kalogiratos: Thanks very much, Jerry. Thank you.
Gerry: Got it thanks very much Gerry.
Liam Burke: Your next question comes from the line of Liam Burke from B&U Riley Securities. Please go ahead. Thank you.
Jon Chappell: Thank you.
Speaker Change: Your next question comes from the line of Liam Burke from B Riley. Please go ahead.
Liam Burke: Hi, Geri. I hope you're doing well. Your analysis between production coming online in 2027 and an aging fleet would not only imply a stabilization of supply-demand, but capacity constraint beyond the 2027-2028 time frame. Are your potential charters of the four unchartered LNG vessels recognizing this, and are you seeing that in your negotiation?
Liam Burke: Thank you Hi, Jerry.
Liam Burke: How are you.
Liam Burke: Thank you I hope you're doing well.
Speaker Change: Your analysis between production coming online in 2027 and <unk>.
Speaker Change: Aging fleet would not only imply stabilization of supply demand, but capacity constraint beyond the 27% 28 timeframe.
Speaker Change: Are your potential charters of the four unchartered LNG vessels, recognizing this and are you seeing that in your negotiations.
Nikos Tripodakis: Liam, I'll let Nikos take this one. All right, thank you. Hi, Liam, and thank you for this question. It's actually a very good one. I think that's exactly what our recent deals reflect, i.e., you know, the front of the curve can be very low and the spot market can be weak, the one-year market can be weak, but when it comes to the supply and demand fundamentals in terms of serious charters that are looking for multiple vessels, efficient vessels, then the weakness dissipates and we revisit, you know, rates and around the 90,000 per day mark. So, I don't know if that answers your question, but charters, yes, understand this deficit coming in the market from 2027-2028 onwards and pay rates that reflect that.
Speaker Change: Liam.
Speaker Change: Let me take this.
Speaker Change: Alright, thank you.
Speaker Change: And thank you for this question is actually a very good one.
Speaker Change: I think thats exactly what our recent deals reflect I E.
Speaker Change: The front of the curve can be very low in the spot market can be weak that one of your market that would be weak, but when it comes to the supply and demand fundamentals in terms of serious charters are looking for multiple vessels efficient vessels than the weakness dissipates and we revisit rates in periods around the 19th.
Speaker Change: And per day Mark.
Speaker Change: No.
Speaker Change: I don't know if that answers your question, but charters guests understand this.
Speaker Change: Ships coming in the market from 2007 onwards.
Speaker Change: Pay rates that reflect that.
Liam Burke: Great, thanks.
Geri Kalogiratos: Jerry, on the four handy-size on order. If the... Do you see the potential for them to operate in the LPG spot market for the time their delivery until you can secure work for them? Yeah, absolutely. I mean, these are multi-gas vessels of the semi-raft type, very, very attractive ships. And as I said earlier on, because the order book is very small and this is an aging fleet in the water, we see quite a bit of interest from, let's say, kind of informal chartering inquiries that is to trade in the grey ammonium and LPG business. Great.
Speaker Change: Great. Thanks, Mike.
Speaker Change: Jerry on the.
Speaker Change: Four handy size on order.
Speaker Change: Yes.
Speaker Change: Do you see the potential for them to operate in the LPG spot market.
Speaker Change: For the for the <unk>.
Speaker Change: There are delivery until you can secure.
Speaker Change: Yeah.
Speaker Change: Worked for them.
Speaker Change: Yes, absolutely.
Speaker Change: Most of the gas vessels.
Speaker Change: What percent of your edge type vary.
Speaker Change: Very attractive ships.
Speaker Change: And.
Speaker Change: <unk>.
Speaker Change: And as I said earlier on because the order book is very small and this is.
Speaker Change: An aging fleet in the water.
Speaker Change: We see.
Speaker Change: Quite a bit of interest.
Speaker Change: Let's say.
Speaker Change: End of normal chartering.
Speaker Change: Inquiries that used to trade.
Speaker Change: Hey, great ammonia and LPG business.
Geri Kalogiratos: Thank you, Jerry. Thank you. Thank you, Liam. Thank you.
Gerry: Great. Thanks, Gerry Thank you Gerry.
Speaker Change: Thank you Dan.
Alexander Bidwell: Your next question comes from the line of Alexander Bidwell from Weber Research and Advisory. Please go ahead. Good afternoon. Thanks for the time. So the three options exercised in the on-water vessels and the two charters for the new builds delivering in 2027 seem to point towards a very clear demand for tonnage 2027 onwards.
Gerry: Thank you.
Speaker Change: Your next question comes from the line of Alexander Goodwill from Weber Research and Advisory. Please go ahead.
Gerry: Yes.
Alexander Goodwill: Good afternoon. Thanks, Thanks for the time so.
Alexander Goodwill: So the three options exercised in the island water vessels and the two charters for the new builds delivering in 2027 seems to point towards a very clear demand for tonnage for 2027 onwards, what are you seeing any uptick in appetite for longer term charters in the near term so say late 'twenty.
Alexander Bidwell: Are you seeing any uptick in appetite for longer-term charters in the near term, so say late 25 into 2026, or are charters expecting the spot market to be more beneficial to them? In terms of earlier deliveries 2025 and 2026, anybody that expected volumes for those periods had already secured shipping for term and there's sort of a lag in terms of how the delay of some projects we expect in 2024-2025 has affected the market exactly because charters had been covered with their shipping positions for those periods. What we do see for deliveries in 2025 and 2026 are opportunistic charters that are trying to take advantage of the weakness in the front of the curve to basically buy some optionality for the years in which they anticipate the deficit of freight to kick in.
Alexander Goodwill: Five.
Alexander Goodwill: 2026, or charterers expecting spot the spot market.
Alexander Goodwill: Or better question for them.
Alexander Goodwill: In terms of earlier during the deliveries 2025 and 2026.
Alexander Goodwill: Anybody that expected volumes for those periods had already secured shipping for term.
Alexander Goodwill: And there are sort of a lag in terms of how the delay of some projects. We're expecting 2020 for 2025 has affected the market exactly because the charters have been covered with our shipping positions for those periods.
Alexander Goodwill: With new C for deliveries in 2025, and 2026 opportunistic charters that are trying to take advantage of the weakness in the front of the curve to basically buy some optionality for the years in which they anticipate the deficits bulk freight to kick in for example, starting 2025 two years.
Alexander Bidwell: For example, starting 2025, two years plus one plus one in terms of options. That is something very common recently when we're discussing about the bids in market for 2025 and 2026, but not for longer periods. There has been one discussion for 2026 delivery for seven years. that concluded this year, but that has been the only one.
Alexander Goodwill: Plus one plus one in terms of options that is something very common recently when we're discussing about the beats in the market for 2025, and 2026, but not for longer periods. There hasnt been one discussion.
Alexander Goodwill: For 2026 delivery for seven years.
Alexander Goodwill: I conclude that this year, but that has been the only one.
Alexander Goodwill: Yeah.
Alexander Bidwell: All right. Thank you. Thank you for the color there.
Speaker Change: Alright. Thank you. Thank you for the color there.
Alexander Bidwell: And then looking, I guess... over at Global Supply Demand. So there's a significant amount of attention on these new liquefaction volumes hitting the market.
Alexander Goodwill: And then looking I guess.
Alexander Goodwill: <unk> sort of global supply demand. So there's a significant amount of attention on these new liquefaction volumes are hitting the market.
Alexander Bidwell: What sort of developments are you seeing on the regas side and what potential headwinds or tailwinds could we see in the carrier market stemming from a over or under supply of regas capacity? It's a good question and what I can tell you in terms of regas capacity both in Europe and Asia is that in the multiples in terms of liquefaction capacity so We don't expect any issues when it comes to regasification capacity being able to cover the liquefaction capacity.
Alexander Goodwill: Sort of developments are you seeing on the re gas side, and what potential headwinds or tailwind could we see in the carrier market stemming from a over or under supply of re gas capacity.
Alexander Goodwill: It's a good question.
Alexander Goodwill: What I can tell you in terms of regas capacity, both in Europe and Asia in the multiples in terms of liquefaction capacity. So we.
Alexander Goodwill: We don't expect any issues when it comes to regasification capacity being able to cover the liquefaction capacity.
Alexander Bidwell: China, Japan, Europe have multiples in terms of their demand for that Okay, and then just a quick follow-up. Just looking at a seasonal basis, Do you see any, I guess, potential tailwinds from floating storage opportunities as we... we enter a period of oversupply of liquefaction capacity. If we're seeing any tailwinds form, sorry I didn't hear that. So do you foresee any tailwinds from floating storage opportunities as we enter a period of oversupply of liquefaction capacity sort of in the back half of the decade? Yeah, it's an interesting question. Traditionally, floating storage in LNG has not worked the same way as does in oil, because obviously of the boil off, it comes at an extra cost.
Alexander Goodwill: China, Japan and Europe.
Alexander Goodwill: Multiples in terms of their demand for that capacity.
Alexander Goodwill: Okay.
Alexander Goodwill: And then just a quick follow up.
Alexander Goodwill: Just looking at a seasonal basis.
Alexander Goodwill: Do you see any potential tailwind for floating storage opportunities as we are.
Alexander Goodwill: We enter a period of oversupply of liquefaction capacity.
Speaker Change: If we're seeing any tailwind for I'm, sorry, I didn't hear that.
Speaker Change: Do you foresee any tailwind from.
Speaker Change: Floating storage opportunities as we enter.
Speaker Change: A period of oversupply of liquefaction capacity sort of in the back half of the decade.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: It's an interesting question traditionally floating slowdowns with LNG is not work the same way that's ignored because ultrashape. The boil off it comes at an extra cost. So you need the contango between specific part of the curve to be steep and what we're seeing right now with all the risks digital political risks around Europe.
Alexander Bidwell: So you need the contango between specific parts of the curve to be steep. And what we're seeing right now with, you know, all the risks, the geopolitical risks around Europe, and the prices of global markets, European prices and Asian prices, we do not see any floating storage being incentivized right now. Obviously, this can change, and it depends a lot on seasonal patterns, you know, storage deficits and contango in the curve. But as of now, we cannot really say that floating storage will be or is, you know, there are any indications that it will be a demand factor.
Speaker Change: And the prices of global markets European prices in Asia prices, we do not see any floating storage being incentivize right. Now obviously this can change and it depends a lot on seasonal patterns.
Speaker Change: George.
Speaker Change: Deficits.
Speaker Change: Where in the curve, but as of now we cannot really say that floating storage will be or is.
Speaker Change: Are there any indications that it will be.
Speaker Change: That demand.
Speaker Change: Factor.
Geri Kalogiratos: All right. Thank you, Gary. I'll turn it back over. Thank you.
Speaker Change: Alright, Thank you Jerry I'll turn it back over.
Speaker Change: Thank you.
Speaker Change: Thank you.
Omar Nokta: Your next question comes from the line of Omar Nokta from Jeffreys, please go ahead. Hi, Jerry. Hi, Nikos. Good morning, or good afternoon. Just a couple of follow-ups on the two new building charters. Obviously, nice to see that, and as you mentioned, it shows that the sector, the business is still operating or functioning appropriately. You didn't explicitly give a rate, but Nikos, you sort of mentioned in your comments that in 2027 rates are closer to 90,000. Should we extrapolate that that's kind of what the rate achieved is on these charters? Yes. Okay, good.
Speaker Change: Your next question comes from the line of from Jefferies. Please go ahead.
Speaker Change: Okay.
Speaker Change: Hi, Hi, Gerry good morning, or good afternoon.
Speaker Change: Just a couple of follow ups on the on the two new building charters, obviously nice to see that as you mentioned the show is that the sector of the business is still operating a functioning appropriately you didn't explicitly give a rate Nicolas you sort of mentioned.
Speaker Change: In your comments that until 'twenty seven rates are close to 90000.
Speaker Change: Should we extrapolate that that's kind of what the rate achieved on these charters.
Speaker Change: Yes.
Omar Nokta: And then what's the expected sort of, given the financing that you'll put on, what do you think the break-even is going to be on these on these new We have not, hi Omar and Jerry, we have not yet concluded on the financing of these assets. We can provide a break-even number potentially in a couple of quarters when we have more visibility. Okay, thank you, and then just... Finally, just on those, the interesting kind of note that you have on those chargers is that you can swap, you can swap to other later generation ships at your choosing, it sounds like.
Speaker Change: Okay.
Speaker Change: And then what's the expected sort of given the financing that you put on what do you think the breakeven is going to be on these on these new buildings.
Speaker Change: We have not Io monetary and we have not yet.
Speaker Change: Concluded on the financing of these assets.
Speaker Change: We can provide.
Speaker Change: A breakeven number.
Speaker Change: Potentially a couple of quarters, when we have more visibility.
Speaker Change: Okay. Thank you and then just.
Speaker Change: Finally, just on those.
Speaker Change: Interesting kind of note that you have on those charges is that you can flopped you can swap two other later generation ships.
Speaker Change: At Youre choosing it sounds like.
Omar Nokta: Clearly gives you some flexibility. Can you just maybe just two questions on that? Can you give just a sense of. What would you say is late generation? Is that all of your ships, or is it just the new builds? And then also, what circumstances or conditions would you want to do that, where you'd want to substitute? Thank you. So that's a very good question. Just to clarify what it means, it means that it is within our option to deliver any of the vessels we have, our new buildings, to those two charters. and a situation whereby we would be incentivized to do something like that would be, you know, let's say we would secure a very good short-term rate for one of the vessels delivering in towards the end of 2026, let's say a six-month winter charter at very high rates, and then we could deliver that vessel to the all your major charters.
Speaker Change: Clearly gives us some flexibility.
Speaker Change: Can you just maybe just two questions on that can you give just a sense of what.
Speaker Change: What is the what would you say is late generation that all of your ships or is it just a new adults and then also what.
Speaker Change: Circumstances are conditions would you want to do that where you'd want to substitute.
Speaker Change: Thank you.
Speaker Change: So very good question.
Speaker Change: Just to clarify what it means it means that it is within our option to deliver any of the vessels we have.
Speaker Change: New buildings to those two charters.
Speaker Change: In the us.
Speaker Change: A situation whereby we would be incentivize to do something like that would be.
Speaker Change: Let's say, we would secure a very good shorter term rates were one of the vessels delivering in towards the end of 2026, let's say six months winter chartered at very high rates and then we could deliver that vessel to be.
Omar Nokta: So it provides a lot of flexibility and optionality for us, which in a market like this is very valuable. Great.
Speaker Change: Or your major charter so it provides a lot of flexibility and optionality for us which in a market like this.
Speaker Change: Is very valuable.
Operator: Well, thank you. That's it for me. Thank you. As a reminder, if you would like to ask a question, please press star 1 and 1 on your telephone keypad. That is star 1 and 1 if you would like to ask a question.
Speaker Change: Yes.
Speaker Change: Great well. Thank you that's it for me.
Speaker Change: Thank you.
Speaker Change: As a reminder, if you would like to ask a question. Please press star one on your telephone keypad that is star one on one if you would like to ask a question.
Clement Mollins: We will now go to the next question. And your next question comes from the line of Clement Mollins from Value Investors Edge. Please go ahead. Hi, good afternoon. Thank you for taking my question. Most has already been covered, but I wanted to delve a bit into your U.S. port fish commentary.
Speaker Change: We will now go to the next question.
Speaker Change: Okay.
Speaker Change: And your next question comes from the line of Kevin Mullins from value Investor's edge. Please go ahead.
Kevin Mullins: Hi, good afternoon. Thank you for taking my questions.
Speaker Change: Most has already covered that.
Speaker Change: I wanted to delve into your U S ports fee commentary.
Clement Mollins: You mentioned U.S.-built LNG carriers by 2029 sounds optimistic, which is almost But could you talk a bit further about your, let's say, theoretical cost expectations for a U.S.-built LNG carrier relative to the usual Korean build? And secondly, based on the current proposal, who will be responsible for complying with this regulation?
Speaker Change: You mentioned USB with LNG carriers by 2029 sounds optimistic which is almost like even but could you talk a bit further about your let's say theoretical cost expectations spray USB LNG carrier.
Speaker Change: As to the usual Korean beauty.
Speaker Change: And secondly, based on the current proposal.
Speaker Change: We'll be responsible for complying with this regulation.
Geri Kalogiratos: So Clement now, this is the more esoteric stuff that we're going into. I don't think anybody has full clarity. What I can tell you from our previous experience is that the rule of thumb has been that the cost of a US-built ship of any type has been maybe three, four times the cost of building the same ship in Korea or China. In this particular case, when we're talking about LNG carriers where there are also additional challenges with containment systems, LNG fueled engines, cryogenics and other more complex machinery.
Speaker Change: So Clinton now.
Speaker Change: This is the more esoteric stuff, but we're going into.
Speaker Change: The and I don't think anybody has flown clarity.
Speaker Change: What I can tell you for a model.
Speaker Change: This.
Speaker Change: Experience is that the rule of thumb has been that.
Speaker Change: Awesome.
Speaker Change: The U S Bill.
Speaker Change: And it has been maybe three or four times.
Speaker Change: The cost of building the same ship.
Speaker Change: In Korea or China.
Speaker Change: In this particular case, what we're talking about LNG carriers, where they are.
Speaker Change: Also a different novel challenges with containment systems.
Speaker Change: LNG.
Speaker Change: Fueled engines cryogenics.
Geri Kalogiratos: I mean, there have been even failures at the beginning in very large shipyards in Korea, you know, when the shipyard was, when the industry started trying new systems. So I think it's going to be quite challenging for you know, a nation CPR capacity to take on such projects, if that exists at all, which many people say that there's no such CPR capacity, at least for another two or three years. Now, with regard to who exactly is going to be responsible to implement that, it looks to me, but again, I'm not 100% sure if there is clarity on that, that it's going to be the liquefaction operators, the exporters that they will have to ensure that their volume is transported on US-built energy ships.
Speaker Change: Theyre more complex machinery, I mean, there have been even failures at the beginning in a very large shipyards in Korea would be.
Speaker Change: The shipyard horse.
Speaker Change: When the industry started.
Speaker Change: Trying new systems, So I think it's going to be quite challenging for.
Speaker Change: Yes.
Speaker Change: <unk>.
Speaker Change: Uh huh.
Speaker Change: CPR capacity take contracts projects, if that exists settles, which many people say that theres no no subsidiary capacities for another two or three years.
Speaker Change: Now with regard to who exactly is going to be.
Speaker Change: Responsible to.
Speaker Change: It meant that it looks to me, but again.
Speaker Change: <unk>.
Speaker Change: I'm not 100% sure. If there is clarity on that is that it's going to be the liquefaction of the herc exporters.
Speaker Change: We'll have to ensure that.
Speaker Change: Therefore, you'll miss transport they don't know.
Speaker Change: U S built.
Speaker Change: And logistics.
Clement Mollins: Makes sense. Thank you for the cover, and thank you for taking my questions. Thank you.
Makes sense. Thank you for the color and thank you for taking my questions.
Speaker Change: Thank you.
Operator: There are currently no further questions.
Speaker Change: Thank you.
Geri Kalogiratos: I will now hand the call back to Gerry for closing remarks. Thank you, Sauron, and thank you all for joining us today. Thank you.
Speaker Change: There are currently no further questions I will now hand, the call back to Jerry for closing remarks.
Speaker Change: Thank you Sharon and thank you all for joining us today.
Operator: This concludes today's conference call. Thank you for participating.
Speaker Change: Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
Operator: You may now disconnect.
Speaker Change: [music].
Yes.
Speaker Change: Yes.
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Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Sure.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].