New York and Oslo-listed Flex LNG has agreed a charter extension for the 173,400 cbm Flex Courageous (built 2019) and Flex Resolute (built 2020) with a “supermajor” charterer.
Flex LNG said the two parties will amend the existing time charter agreements for the two LNG carriers. The charterer and the company have agreed a new firm period from 2029 to 2032 which may be extended by an additional seven years in total until 2039.
If the charterer utilizes all its new extension options, the redelivery of the ships will be 2039.
Chief executive Kalleklev believes that this extension fits with Flex’s communicated strategy of fixing its ships for longer duration at higher rates.
To remind, the two parties on November 1, 2021, agreed time charters 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 time charters (i.e. the charters have a contract structure of 3 years firm plus 2+2 optional years).
As further announced on January 18, 2024, and February 23, 2024, 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 deal 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 time charter 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 charters 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, the company finds 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, said: “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.”
