Q2 2025 Capital Clean Energy Carriers Corp Earnings Call
Operator: Thank you for standing by and welcome to the Capital Clean Energy Carriers Corp. Second Quarter 2025 Financial Results Conference call. We have with us Mr. Gerasimos 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 will 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 one on your telephone and wait for your name to be announced. I must advise you that this conference is being recorded today, July 31st, 2025.
2025 Financial results conference call.
We have with us, Mr. Jerry Calgary, 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 will 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 1 on your telephone and wait for your name to be announced.
I must advise you that this conference is being recorded today, July 31, 2025.
Operator: The statements 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 or unit buyback amounts, capital reserve amounts, distribution 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.
The statements in today's conference calls 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 are objectives regarding future distribution amounts, or unit buyback amounts.
Capital reserve amounts distribution coverage future earnings Capital allocations as well as our expectations regarding Market fundamentals. And the employment of our vessels including redelivery, dates, and Charter rates may be forward-looking statements.
As such is defined in section, 21e of the Securities, Exchange Act of 1934 as amended.
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. I would now like to hand over to your speakers today, Mr. Brian Gallagher. Please go ahead, sir.
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. I would now like to hand over to your speakers today. Mr. Brian Gallagher. Please go ahead. Sir.
Brian Gallagher: Thank you, operator. Good morning or afternoon to you, wherever you are, and thank you for listening to the Capital Clean Energy Carriers Corp. Q2 2025 earnings call. As a reminder, we will be referring to supporting slides available on our website as we go through today's presentation. For kickoff of the highlights slide on slide four, you can see that after a very busy Q1 with new contracts, charter extensions, and vessel sales, Q2 had been much more routine for the company. Net income from operations, primarily from our 15 vessels on the water, 12 LNG carriers and three container vessels, came in for the quarter at just under $30 million.
Thank you, operator. Good morning or afternoon to you wherever you are, and thank you for listening to the Capitol clean energy. Carriers Q2 2025 earnings call. As a reminder, we will be referring to supporting slides available on our website, as we go through today's presentation.
Brian Gallagher: From this, our ongoing fixed distribution of $0.15 per share was paid out to shareholders, meaning the company now paid a cash dividend for every single quarter since our listing in March 2007. Importantly, Capital Clean Energy Carriers Corp. secured some financing on two of our LCO2 carriers, which we start to take delivery of next year. The company is also continuing to look at organic methods to improve the trading in our shares and offer shareholders maximum optionality for their investments. This is reflected in a dividend reinvestment program, a DRIP, being offered for the first time in Q2. The results of this quarter allow investors to see what the core drivers are for the company and what they look like. This has often been overshadowed in recent quarters by other developments, such as asset sales or new contracts.
This ongoing fixed distribution of $0.15 per share was paid out to shareholders. This means the company has now paid a cash dividend for every single quarter since our listing in March 2007.
Importantly, CCC secured some financing on 2 of our lc2 carriers which we start to take delivery of next year.
The company is also continuing to look at organic methods to improve the trading in our shares and offer shareholders maximum optionality for their investments.
This is reflected in a dividend reinvestment program. A drift being offered for the first time in due to.
The results of this quarter allow investors to see what the core drivers are for the company.
Brian Gallagher: As we pivot towards our stated objective and goal of an LNG and gas transportation-focused company, you can see clearly how the company is performing. Our head of commercial will guide us through the key company drivers and interesting sector dynamics within the LNG market later on. I'll now hand over to Gerasimos Kalogiratos, our Chief Executive, to take us through the first financial highlights.
And what they look like. This has often been overshadowed in recent quarters by developments such as asset sales and new contracts. As we pivot towards our stated objective and goal of becoming an LNG and gas transportation-focused company, you can clearly see how the company is performing.
Our head of commercial guide us through the key company drivers and interesting sector Dynamics within the LNG Market later on. But I now hand over to Jerry Keller just to get us our chief executive to take us through the first financial highlights.
Gerasimos Kalogiratos: Thank you, Brian. Good morning to everyone listening today. Indeed, the results of the second quarter of 2025 poorly reflect all our perceived investments being deployed under the respective long-term charters. Unlike previous quarters, we do not have any container vessel sales. Hence, it is quite an indicative quarter in terms of the earnings generation of our fleet at this date, prior, of course, to the expansion of our asset base with the new building, LNG, and other gas vessels that start coming from the first quarter of 2026. Despite an ongoing capital investment program of over $2.3 billion in this new build, the dividend payout remains a core component of the company's value proposition to shareholders. The $0.16 dividend to be paid on August 8th makes this quarter the 73rd contributing quarter that the company has paid a cash dividend.
Thank you, Brian.
Good morning to everyone listening today.
I did the results of the second quarter of 2025 fully reflects all Market, investors being deployed under their respective long-term Charters. And unlike previous quarters, we do not have any container vessels.
Yet, it is quite an indicative quarter in terms of the earnings generation of our freedom. These days prior, of course, to the expansion of our assets base, with a new building, lmg and other gas vessels start coming from the first quarter of 2026,
Despite an ongoing capital investment program of over $2.3 billion, the dividend payout remains a core component of the company's value proposition to shareholders.
The 16-cent dividend will be paid on August 8th, marking this quarter as the 73rd consecutive quarter that the company has paid dividends to its shareholders.
Gerasimos Kalogiratos: Looking now at slide seven, our cash position, which continues to provide the company with a strong buffer, stood at a total of $357 million as of the end of the quarter. Our balance sheet is strong, which is important within the business we operate. We can see that our capital base continues to consolidate as we await the next schedule of ships to be delivered next year. There is a little more to report here, and investors will remember 80% of our funding costs are floating rates. Hence, we expect the benefits to the Fed to start cutting rates in the second half of 2025. During the quarter, we continue to build out on the financing of our new builds on order, and we look a little more deeply at that on slide eight.
Looking now, at slide 7, our cash position which continues to provide the company with a strong buffer, stood that the total of 357 million as of the end of the quarter.
For financing the strong, which is important within the business we operate. We can see that our caps are based on continuous consolidation as we wait for the next schedule of ships to be delivered next year.
There is a little more to report here, as investors will remember that 80% of our financing costs are floating rates. Hence, we expect to benefit should the Fed start cutting rates in the second half of 2025.
So the quarter, we continue to build out on the financial of our new builds uh on order. And we look uh a little more deeply at that on slide 8.
Gerasimos Kalogiratos: We have secured financing for two of the LCO2 carriers that will be delivered to us during 2026. The financing amount is approximately $51 million per vessel and provides for an increased advance amount up to $58.7 million and a lower margin if any of the vessels secure period deployment of three years or longer. We are also making progress on the financing of some of our other new builds on order and expect to have more to report by the next quarterly earnings. Moving on to slide 10, there is our average charter duration at 7.1 years across the fleet and our LNG fleet showcasing a charter backlog of 88 years of time period and $2.7 billion of contracted revenue, or 118 years if all options were to be exercised.
So we have secured financing for 2 of the lc2 carriers, that will be delivered to us during 2026. The financing amount is approximately 51 million per vessel and provides for an increased Advance amount.
Up to 5, 8, 7, 7.
if any of the best on secure period, deployment 3 years or longer,
We're also making progress on the financing of some of our other new Builds on order and expect to have more to report by the next 4 to 10 years.
Moving on to slide 10. The
Exercise.
Gerasimos Kalogiratos: We continue to be in constant dialogue with counterparty regarding our LNG fleet in what has become increasingly a more active period market and looking for the right employment structure for a new build. Nikos Tripodakis will provide more color later on during the call. In summary, we will look to further expand our charter book as we work towards fixing term employment for the remaining assets of our fleet. Heading now to slide 11 and looking at the contracted revenue base in more detail. Here, there is no material change from the first quarter, but worth highlighting the counterparty diversity that our charter portfolio offers. Overall, when it comes to capital, no single counterparty represents more than 20% of the $3 billion contracted revenue backlog.
In what has become increasingly more active period Market?
and looking for the right employment structure for the bills,
Later on during the call.
In summary.
We will look to further expand our Charter book. As we work towards fixing a term employment, for the remaining assets on fleet.
Setting up slide 11 and look at the contracted regular basis in more detail.
Again, here, there is no material tenants from the first quarter. But what highlighting, the counterparty diversity that the charter forces for you offers?
overall, when it comes to
Gerasimos Kalogiratos: This diversity provides the company with a strong framework to build our gas transportation portfolio further with a mix of existing corporate relationships and new customers. I would like to finish an office section now with a quick look at our new building CapEx program and their expectations with regard to its financing. This is described in more detail on slide 12. We ended the quarter with $357 million of cash in our balance sheet, which provides a solid buffer for the business. From our new building program of $2.3 billion that we're awaiting, we have already paid advances by quarter end to the tune of $539 million.
The capital, no single counter party represents more than 20% of the 3 billion. Contracted Revenue, backlog.
This diversity provides the component to a strong framework to build their gas. Transportation portfolio further with a mix of existing corporate relationships and new customers.
I would like to finish off this section. Now with a quick look at our new building capex program and their expectations with regard to financing.
What's that stuff?
So we ended the quarter with 3507 million of customer Valentine, which provides a solid buffer for the business.
From our new building program of 2.3 billion on the way, we have already paid advances by quarter length, to the tune of 539 million.
Gerasimos Kalogiratos: Taking into account the two Liquid CO2 vessels financing we discussed earlier and assuming 70% debt financing of the acquisition price of the LNG carriers and 60% of the other gas vessels, we estimate the total new debt financed for these vessels to amount to approximately $1.6 billion. That would leave us with a net equity inflow of $122 billion, a slight blend of stones that is without taking into account cash flow generation from our existing fleet. I would like to turn now the floor over to our Chief Commercial Officer, Nikos Tripodakis, who will run you through our LNG market slides. I will be available to answer your questions at the end of the call. Nikos, over to you.
Take into account, the 2 liquids and 2. Uh, vessels financing, we discussed earlier and assuming 70% less financing of the acquisition price of the lmd carriers and 60% of the other gas vessels. We estimate. The total new debt, financing vessels to amount to approximately 1.6 billion.
That will deliver us with a net Equity. Inflow of 122 billion as like 11 stars. That is without taking into account custom Generations from all over the city.
I would like to turn now. Um, the floor, over to achieve commercial officer because of khakis who will run you through our lmd Market slides. I will be available to answer your questions at the end of the call Nico's over here.
Nikos Tripodakis: Thank you, Geri, and good morning or afternoon, everybody. Q2 has shown positive signs both on the supply and on the demand side on the LNG freight. Starting with the demand side, one of the most positive signs has been a significant number of new LNG SBA signs. This has been true not only for the second quarter, but throughout the year so far, since the Trump administration took office in late January. Approximately 47 million tons of LNG have been sold under SBA since January, with around 25 of those in Q2 alone. This compares with the historical average per quarter of around 12 million tons, indicating the scale and the pace of this new LNG signing activity.
Thank you. Jerry and uh, good morning or afternoon everybody, you too, have some positive signs both on the supply and on the demand side on the energy Freight,
Starting with the demand side, 1 of the most positive signs has been a significant number of new lmg Spa sign.
This has been true, not only for the second quarter, but throughout the year so far since the Trump Administration took office in late January.
Nikos Tripodakis: Moreover, still on the demand side, Q2 has been a significant uptake in mid and long-term tenders and requirements for various deliveries from 2026 all the way to 2028, with nine tenders running simultaneously at some point in Q2. In summary, the increase in LNG SBAs concluded, as well as freight requirements in Q2, indicates that demand both for LNG as a product and for LNG freight has remained very strong. Moving over to the supply side, a similar story of positive signs prevails. On the supply side, we had a quarter of two positive records, which could lead to a fast market rebalancing. The first one is a record pace at which vessels have been removed from the fleet in Q2 and throughout the year. The second one is a record low number of new building orders placed so far this year.
With 9 tenders running simultaneously at some point, if you do.
The increase in energy, SPAs concluded, as well as straight requirements in Q2 indicates the demand; both were LG as a product and for Freight, and remain very strong.
Moving over to the supply side. A similar story of positive signs prevails.
On the supply side.
Nikos Tripodakis: The combination of this record high removal and record low ordering is only positive towards a quicker rebalancing of the market. If we focus on the right-hand side of slide 15, which shows the total number of vessels scrapped per year, we can see that another four vessels were removed from the fleet. This takes the total number of LNG carrier demolitions in 2025 to 10, surpassing the previous all-time high full year record of eight vessels scrapped in 2024. To add on this, there are rumors of an additional two older LNG carriers being under advanced discussions for removal. Staying on the same slide, the graph on the left is reflected with the commercial pressure on older and lower technology tonnage. The dark blue line shows the trend of increasing idle older vessels, with the percentage of idle steam ships around 17%.
We had a quarter of two positive records, which could lead to a faster market rebalancing. The first is a record pace at which vessels have been removed from the fleet in Q2 and throughout the year. The second is the record low number of new billing orders placed. So far this year, the combination of this record, higher removals, and record low ordering is only a positive towards the correction of the market.
If we focus on the right-hand side of Slide 16,
It shows the total number of vessels scrapped per year. We can see that another four vessels were removed.
This takes the total number of LNG card and demolitions in 2025 to 10. So passing the previous all-time high full year record of Bank vessels described in 2020.
To add on this, there are rumors of an additional two. All the early discussions in Jakarta are being advanced for removal.
Stay on the same slide. The graph on the left is reflective of the commercial pressure on older and lower technologies on it.
Nikos Tripodakis: Given that the majority of the remaining 83% still operates under long-term charters, which are set to expire in the following years, this trend can be thought of as representing a pipeline for future vessels to be scrapped. Vessels will not immediately go to the scrap yard, but the roamers will look at this option after a sustained period of idleness or when the time for a costly special survey comes. Indeed, some analysts expect as many as 35 older vessels to be exited in the LNG fleet each year from now until 2030. While this number might end up being optimistic, the trend set in 2025 is very strong and set to continue. Moving now on the other major supply side development, we will look at slide 16.
The dark blue line shows the trend of increasing Idols. All the vessels with the percentage of vitamins steam ships around 17%
Given that the majority of the remaining 83%, preoccupied under long-term Charters which are set to expire. In the following years, this trend can be thought as representing a pipeline of future vessels in the scrap.
Lessons in the Midway group, but their owners will look at this option after sustaining their devices or when the time for a costly special survey of accounts, indeed.
Someone who expects as many as 3 to 5 older vessels to be exiting the engine fleet each year from now until 2030. What number might end up being optimistic? The trends set in 2023 are very strong and set to continue.
Nikos Tripodakis: As you can see, there has been only one firm order in Q2, which brings the total number of orders in 2025 year to date to just four. This compares with 58 orders in the first half of 2024. To put things further into perspective, the only first half of a single year that has seen fewer orders over the past 15 years was 2020 at the peak of the global pandemic, when U.S. production was being shut in. In terms of rebalancing a currently well-supplied market, this provides another positive data point for the LNG shipping sector. The order group to fleet ratio for a large LNG carrier now stands at just below 44%, reflecting the very rapid slowing of new LNG orders, especially since October 2024.
Moving. Now, on the other major supply side development, where we look at slide 16,
as you can see, there has been only 1 firm ordering Q2, which brings the total number of orders in 2025 here today to Just 4
This compares with 58 orders in the first half of 2024. To put things further in perspective, the only first half of a single year that I have seen fewer orders over the past 15 years was 2020.
The take of the global pandemic when the US production was being shot in.
In terms of rebalancing, I currently well-supplied market, which provides another positive data point for the energy shipping sector.
The order book and fleet ratio for a large energy carrier is now standard just below 44%, reflecting the very rapid slowing of new energy orders, especially since October 2024.
Nikos Tripodakis: The run rate of total orders data over the past 12 months slowed to fewer than 20, and as the dark blue bars show, there have been several individual months where no new LNG orders were made. This is an encouraging setup for the industry. Participants like ourselves feel in the SBA development that we have seen in the past six months, and also the lead time for ordering LNG vessel delivery remains between three and four years. I will now turn to our summary of slide 17. This slide graphically shows where Capital Clean Energy Carriers Corp. believes the energy market is currently positioned, and it's an updated version of the same slide we used for Q1's call. An inflection point for the LNG market between supply and demand is forecasted in 2027.
The the Run rate of total orders made over the past 12 months has slowed fewer than 20 and now the dark blue bars show. There have been several individual months where no new Legend will remain.
This is an encouraging setup for the industry. Participants like ourselves, given the spa developers, have seen in the past 6 months, and also the lead time for ordering an engine, which doesn't deliver, remaining between 3 and 4 years.
I will now turn to our summary of slide 17.
The slide graphically shows where CCC may live. The energy market is currently positioned, and it's an updated version of the same slide we use for Q1 scope.
Nikos Tripodakis: In our view, there is one key trend that could potentially bring the inflation to point forward, and that is the acceleration of steam vessel removals. Moreover, there are two other trends that increase the magnitude of how undersupplied the market is beyond that inflection point. Those are the very strong LNG supply growth and the absence of new LNG orders. In any case, Capital Clean Energy Carriers Corp. is ideally positioned to benefit with open fleet positions into 2026 and 2027 into what we believe will be a strengthening market, both in terms of long-term time chart development and industry dynamics. I will now hand the presentation back to Gerasimos Kalogiratos for a summary of Q2 and the company positioning going forward.
A collection point for the LMG market between supply and demand is $3 forecast in 2022. In our view, there is one key trend that could potentially bring in for election a total forward. And that is the acceleration of steam vessel removals.
Moreover, there are 2 other trends that increase in magnitude of how undersupply the market is beyond that inflection point. And those are the very strongly lenders Supply growth and the absence of new LGC orders.
In any case CCC is ideally positioned to benefit with open positions into 2026 and 2027 into what we believe will be a strengthening Market. Both in terms of long term, time travel development and Industry Dynamics.
I will now hand the presentation back to Jerry for some reason with you too, and the company positioning going forward.
Gerasimos Kalogiratos: Thank you, Nikos. Focusing on our present and the future fleet of slide 19, provided opportunity to round out the prior Capital Clean Energy Carriers Corp. and our direction going forward. We continue to be opportunistic about fixing long-term employment for our four outstanding latest generation LNG carriers, as there are increasingly fewer uncommitted LNG new builds available at the time when we see growing activity in the LNG industry, both in the U.S. and the exam that the FID is being taken at Stratford by Nikos. Our 10 specialist gas carriers are complementary to our LNG operation and leverage to the energy transition, and we expect to have more color with regard to their employment closer to their delivery. As discussed earlier, we have started to finance these deliveries and expect to have more news flow in this regard in the coming quarters.
Thank you, Nikos.
Focusing on our presence and uh future plate on July 19th. Providing opportunity to round out where CC cc is and the direction going forward.
If you are uncomfortable with the new builds available at the time, when we see growing activity industry, both in usba we designed the fit is being taken. I describe the recommended process.
Our 10 Specialists gas carriers are complementary to our energy operation and leverage the energy transition.
And we expect to have more color with regard to the employment closer to the delivery.
Discussed earlier we have started to finance the deliveries and expect to have more use lower in this regard to the coming quarters.
Gerasimos Kalogiratos: Finally, our three legacy container vessels are well underpinned on long-term charters, potentially out to the end of the next decade, but provide optionality for Capital Clean Energy Carriers Corp. moving forward. In short, in all parts of the Capital Clean Energy Carriers Corp. fleet, we have focused and are executing on the choice strategy in this specific area. Now turning to the final slide, Capital Clean Energy Carriers Corp. has continued delivering on the objectives we set out, and the scale of that delivery has been particularly strong in the first half of 2025. The LNG shipping industry dynamic has been overall positive developments during the second quarter, supporting the company's specific progress we made with contract originations and extensions during Q1.
Finally, our 3 Legacy container vessels are well, underpinned, and longer instructors. Potentially out to the end of the next decade, but provide optionality for cc forward.
In short.
In all parts of the cccc league. We have focused and are executing on the social strategy in this specific area.
So now turning to the final slide,
Captain clean energy. Carriers has continued to deliver on the objectives, we set out and the scale of that delivery has been particularly strong in the first half of 25.
Gerasimos Kalogiratos: Importantly, this company has and will continue to have going forward a very unique lead, delivering the lowest unit freight cost possible today to our customers with the lowest environmental footprint. Those critical aspects of success, given the commercial requirements of our charters and the emerging regulatory environment when it comes to carbon and methane emissions. Looking forward, Capital Clean Energy Carriers Corp. is expected to control the largest LNG to straw carrier fleet available to investors upon delivery, in addition to the other 10 multi-gas vessels. The company has considerable contract coverage of over 70 years already and strong visibility of cash flows, while we believe that we have an advantage over many of our peers in only being invested in the latest generation gas vessels. With that, I will now pass it back to the operator for questions. Thank you.
The LG shipping industry. Dynamic has been overall positive developments during the second quarter, a supporting the combat specific progress. We made with contract originations and extensions during q1,
Importantly, this company has and will continue to have go forward, a very young clip, delivering the lowest unit trade cost possible today to our customers with the lowest environmental footprint.
From Crystal aspects of success, given the commercial requirements of our chapters and the emerging regulatory environment. When it comes to carbon and methane emissions,
Looking forward to CCC, is expected to control the largest MMG, 2-stroke carrier rate available to investors upon delivery.
In addition to the other 10 multi gas stations.
The company has considerable contract coverage of over 70 years already and strong visibility of cash flows. We believe that we have an advantage.
In only being invested in the latest generation gas lessons.
And with that, I will now pass it back to the operator for questions. Thank you.
Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question will come from Alexander Bidwell with Webber Research & Advisory.
If you would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
And our first question will come from and Alexander Bidwell with Weber research advisory
Alexander Bidwell: Thank you. Thank you for the time, guys. Taking a look at the coming wave of merchant capacity, could you walk us through how these increased merchant volumes may impact the carrier market in comparison to volumes tied to long-term agreements? Do these larger merchant books have a potential to drive carrier demands more than fixed SBAs?
thank you. Uh, thank you for the time guys. Um, so taking a look at the, uh, the coming wave of, uh, uh, Merchant capacity. Um, could you walk us through how these, uh, increased Merchant volumes may impact the carrier Market in comparison to uh, volumes types. Longterm agreements. Um, do these larger Merchants books have a uh I guess a potential to drive. Carrier demands more than uh uh I guess fixed spas.
Gerasimos Kalogiratos: Yes, it is a good question. The main story here is that most of those contracted volumes and the SBAs we are seeing, and also these projects that have been taking FID one after the other so far this year, do not have secure shipping on the back of those FIDs or the SBAs. You are looking at an over-order book that has 16 or 17 vessels available still left all the way to 2029, and demand for approximately, under conservative assumptions, 1.5 vessels per MTPA, you are looking at a demand for around 300 ships. That was the number last time. There is still yard capacity for 2029, and there is also yard capacity for 2028. But given the 50% growth in the LNG market commodity side, there is simply not enough freight to cover that 2027 or 2028 onwards. That is the thesis.
Yes, it's a good question. Um well the main story here is that most of those contracted volumes and the SB Spas we're seeing and also these projects that have been you know, taking FID 1 after the other. Um so far this year do not have secure shipping on the back of those fids or the Spas. So you're looking at an old order book that has 16 or 17 vessels available. Still left all the way to 2029 and demand for approximately. Well depend on the cons conservative assumptions you know 1 and a half vessels.
For mtpa, you're looking at a demand for around 300 ships, that that's the number last time. So obviously there still are capacity for obviously for 2029. And there is also your capacity for 2028 but given the
50% growth in the LNG Market commodity side.
There is simply not enough way to cover that 2027 or 2028 onwards. And that's the that's the thesis.
Alexander Bidwell: All right. Thank you for the color there. Taking a look at the multi-gas carriers and the handy liquid CO2/multi-gas carriers with delivery just around the corner in 2026, how are near-term employment prospects looking and what sort of conversations are you having around longer-term fixtures as well as LCO2 transportation?
All right, uh, thank you for the color there. Um, and then taking a look at, uh, the um, multitask carriers and, um, the lc2 carriers with the delivery, just around the corner and, uh, in 2026. Uh, how are near-term employment prospects looking, and, uh, what sort of conversations are you having around uh longer term fixtures as well as uh, lc2 transportation?
Gerasimos Kalogiratos: Yeah, it's a fair question. The LCO2 market is obviously a new space for us, but we have been looking at it. What we did realize recently is that it's very different from the LNG space. In the LNG space, you fix a vessel two years in advance and for much longer periods, whereas this multi-gas carrier markets, whether it's CO2, LPG, or ammonia, are more, the fixing window is much closer to the delivery timing. I would say in these markets, we expect within the next three to four months to have more concrete commercial discussions, because basically the commentary and what we've seen so far is that it's too far out to discuss these vessels on a firm basis. Both the time charter periods and the timeframe for fixing those ships is just shorter compared to LNG.
Um, yeah, it's a third question. And, you know, the lc2 market is obviously the new space for us, but we have been looking at it. And what we did realize recently is that it's very different from the LG space in the LG space. You, you know, fix a vessel 2 years in advance and for much longer periods. Whereas this multi gas guider markets, where the whether it's a CO2 you know, LPG or ammonia are more. The fixing window is much uh closer to the deliver.
So I would say in this markets we expect within the next 3 to 4 months to have more concrete commercial discussions. Um because basically the commentary and what we've seen so far is that it's too far out to discuss this vessels on affirm basis.
Both that are the time Charter periods and the time frame for fixing those ships is just
Gerasimos Kalogiratos: Now we are seven months or six months prior to the first delivery. Within the next quarter, we will have something to update on this.
shorter compared to LNG. So now we are 7 months or 6 months prior to the first delivery within the next quarter. We will have something to update on this.
Alexander Bidwell: All right. Thank you very much. I'll turn it back over.
All right, thank you very much. I'll turn it back over.
Operator: Thank you. Our next question comes from Omar Nokta with Jefferies.
Thank you. Our next question comes from Omar Napa with Jefferies.
Alexander Bidwell: Thank you. Hi, guys. Thanks for the update. I did actually just want to maybe follow up on the last question on the MGCs and the CO2 carriers. Obviously, you mentioned the window gets shorter in terms of fixing. Is the plan, you think, still to deploy them on, say, medium-term or long-term contracts, or do you think these will ultimately be destined for spot trading?
Thank you.
hey guys, thanks for the
question on the mgc's and the CO2 carriers obviously you you mentioned the window gets shorter uh in terms of fixing is is is the plan that you think still to deploy them on on say medium-term or long-term contracts or do? You think these will ultimately be destined for for spot Trading?
Gerasimos Kalogiratos: Hi, Omar. It's Geri. So I think we will be quite opportunistic about the fixing of the ships, and we will be also driven by the opportunity. Of course, as far as the LCO2 carriers, we want to be mindful of positioning the vessels to get into the LCO2 business in the medium to long run. Unless it's LCO2 business, I don't think we will go for very long-term on those ships. We will just want to make sure that we have potentially spot to medium term, call it up to two or three years, in order to be able to take on projects from 2028, 2029 onwards. There is also a bundle of customer charters that have a portfolio of products. Some of them, they would, for example, trade LPG, gray ammonia. They are looking to take on volumes of blue ammonia and then also have LCO2 business.
Hi Omar. It's, uh, Jerry. Um, so I think we will be quite opportunistic, um, about, um, the fixing of the ships. Um, and um, we'll also be driven by the opportunity, of course. Um, as far as the LCO2 carriers, uh, we want to be mindful of uh, positioning the vessel.
To get into the lco to business, um, in the medium to long run. Um, so, um, unless um, it's
Um, to take on projects from 202829 onwards.
Um, there is also a bundle of customer charters that are, um,
Have a portfolio of uh products. Some of them, they would. Um for example, trade LPG gray ammonia. They are um, looking to um, take on volumes of blue ammonia. And then also have um, um, uh,
Gerasimos Kalogiratos: This would be an ideal customer because, you know, they can take the ship for five, ten years, and they can trade it around their different products. This vessel is ideal. It has the ability to take on all these cargoes. Now, with regard to the MGCs, slightly different. There, you have, let's say, a short to medium-term time charter structure and a not so liquid spot market. There, we will take a view on the market. Depending on the opportunity, we might fix a shorter term, which is more likely at this point. When I say shorter term, six months to a year. We are also very focused on some longer-term opportunities that are being discussed. As Nikos said, hopefully, over the next quarter or two, we can update you on that. It might be a mix of, let's say, shorter-term charters as well as longer term.
Lc2 business. Uh, this would be an ideal Customer because, you know, they can take the ship for 5, 10 years, and they can, uh, trade it, um, around their different products. And this special is ideal. I mean, it has the ability to, uh, to take on all these Cargoes. Now, with regard to the mgc's, um, slightly, uh, slightly different. They are, um, you have, um, let's say a short to medium uh, term uh um, time Charter structure, um, and and not so liquid, uh, spot Market. Um, so there we will take a view, uh, on, uh, the markets depending on the opportunity. We might fix a shorter term, which is more likely at this point when I say, shortterm 6, uh, 6 months to a year, but, uh, we are also, um, very focused on, uh, uh, some longer term, uh, opportunities, uh, that are being discussed. And, um, as Nico said, hopefully over the
Next um quarter or 2, we can update you on that. So it might be a mix of. Let's say shorter term uh Charters as well as longer term.
Alexander Bidwell: Great. Thanks, Gerasimos Kalogiratos. Obviously, that was very helpful and very detailed. Appreciate that color. Then maybe just kind of a perhaps bigger picture, we have seen sentiment in the LNG sector here, maybe over the past week, ever since the U.S.-E.U. deal. The sentiment has gotten better, at least in terms of the equities and investor interest. Have you seen any of that optimism thus far translate into the charter markets? Has it prompted any more discussions for charters, or is it still too early?
Great. Thanks Jerry obviously, that's that was very helpful and very detailed. So appreciate that color and then maybe just kind of, maybe perhaps, bigger picture. You know, we've seen sentiment in LNG sector here, um, maybe over the past week ever since the US EU deal, um, you know, since it's gotten better. Um, have you at least in terms of the equities and and investor interest? Have you seen any of that optimism, thus far, translate into the charge of markets as it prompted, any more discussions for for for Charters or or or is it still too early?
Uh,
Gerasimos Kalogiratos: Yeah, this deal between the U.S. and Europe obviously is a good thing. Now, it remains to be seen how exactly it will play out because we are talking about a massive increase in terms of purchases from the EU towards from the U.S. LNG. The point is it has certainly had some ripple effect on shipping, as we have seen multiple term requirements coming out and surfacing over the past month, month and a half. We mentioned in the presentation that there are live nine requirements live simultaneously in Q2. Right now, there are still multiple of them, and some of them are from the U.S. All I can share at this stage is that we are involved in those actively. Yes, it has affected the sentiment and the demand for LNG shipping.
yeah, this this deal between the US and Europe. Obviously is a good thing. Now, you know, it remains to be seen how exactly to play out because we're talking about a massive increase in terms of, um,
Purchases from the EU towards from the US LNG. But the point is, it has certainly had some Ripple effects on shipping. Uh, as we have seen multiple term requirements, um, coming out and surfacing over the past month, month and a half.
so,
We currently we mentioned in the presentation that there are live 9 requirements live uh, simultaneously in Q2 right now, there are still multiple of them and some of them are from the US and, um, all I can share at this stage is that we are involved in those, um, actively. So,
Gerasimos Kalogiratos: We expect that it will continue to do so, especially as we see more and more LNG SBA signed from European counterparties like ENI, like the Germans, Heffe, and all that, which have surfaced in the news over the past two weeks. Mentioning these companies, just to complement this last comment, we have seen a long-term requirement from these companies on the back of those volumes signed.
Yes, it has affected the sentiment and the demand for relationship, and we expect that, you know, it will continue to do. So especially as we see more and more LNG SBA signed from European counterparts, like eni like um, um, you know, the Germans have and all that which have surfaces in the news over the past 2 weeks,
And mentioning, you know, this companies mentioning the scope and is just a, a compliment. This this last comment. Um we have seen a long-term requirement from these companies on the back of those volume signs.
Alexander Bidwell: Okay. Interesting. Well, thanks. We will look forward to seeing how those develop. Appreciate the insight and color. I will pass it back.
Okay, interesting. Well, thanks. We'll look forward to seeing how those develop. Appreciate the insight and color. I'll pass it back.
Operator: Again, that is star one if you would like to ask a question. We'll go next to Liam Burke with B. Riley Securities.
again, that is
Liam Burke: Thank you. Hi, Gerasimos. Gerasimos, it looks like you have a significant first-mover advantage on the dual-fuel medium gas carriers and the handy liquid CO2/multi-gas carriers. Do you anticipate any followers or any kind of growth in the order book anytime soon?
1, if you would like to ask a question, we'll go next to Liam Burke with B rally securities.
Thank you. Hi Jerry.
Um,
Jerry, uh, it looks like you have a significant first mover advantage on the medium gas carriers and the liquid CO2. Uh, do you anticipate any followers or any kind of growth in the order book anytime soon?
The.
Gerasimos Kalogiratos: The order book varies. Only a handful of vessels, which are vessels, as well as some vessels that are on order for the Northern Lights project. There is a lot of activity in the background and a number of discussions ongoing for a number of different types of liquid CO2 carriers and different sizes, which is all very encouraging. If I had to guess, I think we will definitely see more ordering in that direction over the next 6 to 12 months, as a lot of these projects are reaching the level of maturity needed to result into orders.
in the order book there is only a handful of vessels which our vessels as well as um um some vessels that are on order for the um,
Gerasimos Kalogiratos: Overall, I think what we see is that if you were to look at the projects that are maturing or under development today, compared to the shipping needs that this would generate, and then you look at shipyard capacity, I think that is going to be a very tight market because I think, as we have discussed in previous calls, these types of vessels are quite sophisticated. They have sophisticated equipment, but more importantly, the specialized material that is required to build tanks to carry liquid CO2. Their processing is not readily available. There is only a limited number of subcontractors, especially in Korea, but also in China. That would mean that the capacity of shipyards to generate or to produce ships as they are required will be quite restricted.
Definitely see uh, more um, ordering in that direction, over the next 6 to 12 months, as a lot of these projects are um you know, uh reaching, um um the level of maturity needed to result into uh into orders. Um, but overall um I think what we see is that, um,
If you were to look at the projects uh, that um are uh, maturing or under development today, um, compared to the shipping needs that this would generate and then you look at um CPR capacity. Um, I think that's going to be a very uh tight Market because I think, as we have discussed in previous calls this type of vessels are quite sophisticated. They have, um, a sophisticated equipment, but more importantly, um, the um, specialized zero that is required to build uh tanks um, to carry liquid CO2. Um, and their processing is uh, is not readily available. They are only, uh, there's only a limited number of subcontractors in, especially in Korea, but also in China. So, that would mean that, um, the capacity of CPI yards to generate
Gerasimos Kalogiratos: So we believe that if projects continue to mature at current volumes, we will have a bit of a tight market there in three or four years from now. Again, we are still quite a bit far away from having full visibility.
Or to produce ships, as they required, will be quite restricted. So we believe that, if projects continue to mature at um, um,
At current volumes, we will have um, a bit of a tight Market there in. Um,
3 to 4 years from now. But again, we are still, uh, um, quite, um, a bit, uh, far away from, um, um, from having full visibility.
Liam Burke: Great. Thank you, Geri. On the financing of the first two vessels, do you anticipate being able to finance the new builds as they come online? Was it an easy process, or is this something where it's a newer asset and lenders are a little hesitant?
Great. Thank you, Jerry. And, uh, on the financing of the first 2 vessels, um,
Do you anticipate being able to, uh, finance the new bills as they come online? Uh, was it a, uh,
Is this an easy process, or is this something where it's a newer asset? And, uh, lenders are a little hesitant?
Gerasimos Kalogiratos: I think it was an easy process. If anything, I would say they were quite popular given their potential to trade in this part of the economy, the energy transition part of the economy. I have to stress also the fact that they have the optionality to trade in the normal hydrocarbon and gray ammonia market. These vessels have the perfect flexibility, so they were quite popular with financiers. As I said in the call, I expect that we will have more news in the coming months in this direction, as well as on other new building vessels. Given the current financing market and the prospect of these vessels, as well as latest generation LNG carriers, I don't foresee any issues with the financing.
Well, I I think, um, it was uh, an easy process. If anything I would say they were uh, quite popular, um, given um, their potential to trade in, um, the uh, this type of, um, this part of the economy, the energy transition, part of the economy. And, uh, I have to stress. Also, the fact that they have the optionality to trade in the normal hydrocarbon and gray ammonia market. So you know, these vessels have the perfect flexibility. Um, so
They were quite popular with Finance years. Um, as I said in the call, I expect that we will have more news uh in uh uh the coming months in this direction, as well as on other new building. Uh vessels.
Um, I, you know, given the current, um, um,
Liam Burke: Great. Thank you, Gerasimos Kalogiratos.
Financing market and the prospect of, um, these vessels, as well as LNG carriers. I don't foresee any issues with the financing.
Great. Thank you, Jerry.
Gerasimos Kalogiratos: Thank you.
Thank you.
Operator: Thank you. This does actually conclude our question and answer session. I would like to turn the floor back over to our CEO for closing comments.
Thank you. This does actually conclude our question and answer session. I would like to turn the floor. Back over to our CEO for closing comments.
Nikos Tripodakis: Thank you, and thank you everyone for dialing in today.
Uh, thank you and uh, thank you everyone for dialing in today.
Operator: Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.
Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference, you may disconnect your lines and have a wonderful day.