Flex LNG secures Time Charter extension for Flex Courageous and Flex Resolute by up to 10 years from 2029
Flex LNG has secured a significant time charter extension for two LNG carriers, Flex Courageous and Flex Resolute, with a Supermajor. The new agreement adds a firm three-year period from 2029 to 2032, with options to extend up to 2039 through three additional periods (2+2+3 years). This extension builds upon existing charter agreements from 2022, where the Charterer has already exercised the first two-year extension option until 2027, with another option remaining until 2029. The new extension demonstrates Flex LNG's strategy of securing longer-duration contracts at higher rates.
Flex LNG ha ottenuto un'importante estensione del contratto di noleggio per due metaniere, Flex Courageous e Flex Resolute, con una supermajor. Il nuovo accordo prevede un periodo fermo di tre anni, dal 2029 al 2032, con opzioni per estendersi fino al 2039 attraverso tre ulteriori periodi (2+2+3 anni). Questa estensione si basa sugli accordi di noleggio esistenti dal 2022, dove il noleggiatore ha già esercitato la prima opzione di estensione di due anni fino al 2027, con un'altra opzione che rimane fino al 2029. La nuova estensione dimostra la strategia di Flex LNG di garantire contratti a lungo termine a tariffe più elevate.
Flex LNG ha asegurado una extensión de contrato de tiempo significativa para dos barcos de GNL, Flex Courageous y Flex Resolute, con una supermajor. El nuevo acuerdo incluye un período firme de tres años desde 2029 hasta 2032, con opciones para extenderse hasta 2039 a través de tres períodos adicionales (2+2+3 años). Esta extensión se basa en los acuerdos de arrendamiento existentes desde 2022, donde el arrendatario ya ha ejercido la primera opción de extensión de dos años hasta 2027, quedando otra opción disponible hasta 2029. La nueva extensión demuestra la estrategia de Flex LNG de asegurar contratos de mayor duración a tarifas más altas.
Flex LNG는 두 개의 LNG 운반선, Flex Courageous와 Flex Resolute에 대해 슈퍼메이저와의 상당한 시간 채권 연장을 확보했습니다. 새로운 계약은 2029년부터 2032년까지의 3년 고정 기간을 추가하며, 3개의 추가 기간(2+2+3년)을 통해 2039년까지 연장할 수 있는 옵션이 포함됩니다. 이 연장은 2022년부터의 기존 채권 계약을 기반으로 하며, 임대인은 이미 2027년까지의 2년 연장 옵션을 행사했으며, 2029년까지 사용할 수 있는 또 다른 옵션이 남아 있습니다. 새로운 연장은 Flex LNG의 더 긴 기간 계약을 높은 요율로 확보하려는 전략을 보여줍니다.
Flex LNG a obtenu une extension significative de son contrat de location pour deux méthaniers, Flex Courageous et Flex Resolute, avec une supermajor. Le nouvel accord ajoute une période ferme de trois ans, de 2029 à 2032, avec des options pour prolonger jusqu'en 2039 par le biais de trois périodes supplémentaires (2+2+3 ans). Cette extension s'appuie sur les accords de location existants depuis 2022, où le locataire a déjà exercé la première option d'extension de deux ans jusqu'en 2027, avec une autre option restant valable jusqu'en 2029. La nouvelle extension illustre la stratégie de Flex LNG de sécuriser des contrats de plus longue durée à des taux plus élevés.
Flex LNG hat eine bedeutende Charterverlängerung für zwei LNG-Carrier, Flex Courageous und Flex Resolute, mit einem Supermajor gesichert. Die neue Vereinbarung umfasst einen festen Zeitraum von drei Jahren von 2029 bis 2032, mit Optionen zur Verlängerung bis 2039 über drei zusätzliche Zeiträume (2+2+3 Jahre). Diese Verlängerung baut auf den bestehenden Chartervereinbarungen aus dem Jahr 2022 auf, bei denen der Charternehmer bereits die erste zweijährige Verlängerungsoption bis 2027 ausgeübt hat, mit einer weiteren Option bis 2029. Die neue Verlängerung zeigt die Strategie von Flex LNG, längerfristige Verträge zu höheren Tarifen zu sichern.
- Secured long-term revenue visibility through charter extension until 2032, with potential extension to 2039
- Enhanced contract stability with a Supermajor customer
- Strategy execution success in securing longer duration contracts at higher rates
- None.
Insights
This charter extension deal represents a significant strategic win for Flex LNG, substantially improving their long-term revenue visibility. The agreement with a Supermajor for Flex Courageous and Flex Resolute includes a firm 3-year period from 2029 to 2032, with potential extensions until 2039. This structure provides exceptional contract coverage, reducing spot market exposure and securing stable cash flows.
The sequential extension pattern (3+2+2+3 years) demonstrates strong charterer confidence in Flex LNG's operational capabilities and vessel quality. The timing is particularly strategic, as it comes amid growing global LNG infrastructure development and increasing demand for LNG transportation. This extended commitment from a Supermajor strengthens Flex LNG's market position and provides robust financial predictability for the next decade.
This charter extension significantly enhances Flex LNG's financial stability and enterprise value. Long-term contracts with Supermajors typically command premium rates and provide reliable cash flow streams, important for debt service and shareholder returns. The extended duration until potentially 2039 creates an exceptional backlog, likely improving the company's credit profile and reducing financing costs.
The deal's structure, with multiple extension options, offers valuable flexibility while maintaining baseline revenue security. This type of arrangement is particularly valuable in the cyclical LNG shipping market, providing protection against rate volatility while retaining upside potential through rate adjustments at extension points.
As communicated by the Company on November 1, 2021, Flex LNG and the Charterer then agreed TCs for the two ships with commencement during the first quarter of 2022 where the firm period was three years for each of the LNG carriers and where the Charterer could extend each ship by two additional two-year periods. In the event both extension options are declared, the period would thus increase to seven years under each of the TCs i.e. the TCs have a contract structure of 3 years firm plus 2+2 optional years.
As further announced on January 18, 2024, and February 23, 2024, respectively, the Charterer declared the first two-year options to extend the firm period for the ships from first quarter of 2025 until first quarter of 2027. Hence, the Charterer currently has remaining options to extend the period for each ship by another two-year period until first quarter of 2029. These two options are declarable in the first quarter of 2026.
Under the amended TC for both ships, the Charterer has added a minimum three-year firm period from 2029 until 2032. At the same time, the Charterer has the option to extend each TC by three additional periods consisting of two periods of each two years while the last period is for three years. Hence, the parties have agreed to add an additional contract structure of 3-year firm plus 2+2+3-optional years to the existing TCs from 2029 onwards. In the event, the Charterer utilizes all its new extension options, the redelivery of the ships will be 2039. The new firm periods, with associated options, are agreed regardless of whether the Charterer declares the last existing extension option from 2027 to 2029 for the two ships. However, we find it likely that this extension option also will be utilized given the new firm period from 2029.
Øystein Kalleklev, CEO of Flex LNG Management AS commented:
"We are happy to announce another substantial charter extension for Flex Courageous and Flex Resolute. Customer satisfaction is paramount to Flex LNG and we therefore focus on delivering not only advanced vessels, but also a superior service level in everything we do from shore to sea. Hence, we are very pleased that our existing Charterer have agreed to continue to work together with us for a very long period to come. This extension fits with our communicated strategy of fixing our ships for longer duration at higher rates."
For further information, please contact:
Mr. Øystein Kalleklev, CEO of Flex LNG Management AS
Telephone: +47 23 11 40 00
Email: ir@flexlng.com
About Flex LNG
Flex LNG is a shipping company focused on the growing market for Liquefied Natural Gas (LNG). Our fleet consists of thirteen LNG carriers on the water and all of our vessels are state-of-the-art ships with the latest generation two-stroke propulsion (MEGI and X-DF). These modern ships offer significant improvements in fuel efficiency and thus also carbon footprint compared to the older steam and four-stroke propelled ships. Flex LNG is listed on the New York Stock Exchange as well as Oslo Stock Exchange under the ticker FLNG.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
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SOURCE Flex LNG
FAQ
What is the new charter extension period for Flex Courageous and Flex Resolute (FLNG)?
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