(Updates with analyst comment in second paragraph.)
Oct. 19 (Bloomberg) -- Golar LNG Ltd., the liquefied natural gas tanker owner led by billionaire John Fredriksen, rented its Golar Grand to a “major oil and gas company” for three years. The shares jumped the most in a month.
The rental starting March 2012 is expected to contribute $39 million to annual earnings before interest, taxes, depreciation and amortization, Fredriksen said in a statement today from the headquarters in Hamilton, Bermuda. The rent is estimated at $125,000 a day, said Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo.
“We continue to see very limited LNG shipping availability,” Fredriksen said. “The strong underlying market trend and our large newbuilding program is likely to give rise to a significant increase in Golar’s earnings in the period 2011 to 2014.”
Golar rose as much as 13 kroner, or 6.5 percent, to 214.5 kroner, the biggest increase since Sept. 20, and was at 211 krona at 1:23 p.m. in Oslo trading. The stock has more than doubled this year. There is an option to extend the Golar Grand rental period for another three years, the company said.
The rental rate is based on daily expenses of $14,000 for 350 operating days, according to Stavseth. “Given the tightness presently witnessed in the LNG shipping market, we think charterers will be willing to pay a higher rate to lock in tonnage over the next two to three years,” he wrote.
In comparison, rental income for very large crude carriers hauling 2 million barrels of Middle East oil to Asia were at minus $2,155 yesterday, compared with $177,000 a day in 2008, according to the London-based Baltic Exchange. Rates to hire capesize ships, used to carry iron ore and coal, were $29,669 a day, up 48 percent this year, according to the exchange.
About 90 percent of world trade is transported by sea, the Round Table of Shipping Associations estimates.
--With assistance from Meera Bhatia in Oslo. Editors: Claudia Carpenter, Sharon Lindores
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