Cool Company Ltd. (NYSE: CLCO / CLCO.OL, CoolCo) announced today that it has entered into a new time charter agreement for one of its TFDE vessels. The 12-month time charter is with Santos Shipping Singapore Pte Ltd and is scheduled to commence in the first quarter of 2024.
In the third quarter of 2024, the vessel is expected to undergo its scheduled drydock, at which time the Company also intends to upgrade the vessel to LNGe specifications. LNGe specification upgrades include the addition of reliquefaction capability via state-of-the-art sub-coolers, as well as air lubrication systems and a range of optimizations and upgrades intended to enhance efficiency and reduce emissions. In line with the anticipated enhanced performance profile of the vessel following the LNGe specification upgrades, the charter includes an innovative commercial mechanism to reward both the charterer and CoolCo.
The Santos charter takes CoolCo’s fleet utilization to 100% until our next vessel becomes available, not before the end of the second quarter. This enables CoolCo management to extend its total operating revenue guidance to $88-89 million for 1Q24 ($99 million 1Q23) and $84-85 million for 2Q24 ($90 million 2Q23), subject to no technical off-hire. The anticipated lower expected revenue range in the second quarter of 2024 is primarily related to off-hire during a scheduled drydock of another vessel that is expected to be completed within the same quarter. The 1Q23 comparison period includes a contribution from the Seal, a vessel that was sold in 1Q23.
“We are delighted with this innovative agreement that provides and aligns incentives between the owner and the charterer, which is expected to enhance efficiency and minimize emissions on one of our modern TFDE vessels,” said Richard Tyrrell, CEO of CoolCo. “This groundbreaking charter is the first to incorporate our LNGe upgrade and our first with Santos. It serves as a model for joint participation in the benefits of our investment in upgrading existing vessels.”