2012 is turning out to be a pretty good year for billionaire John Fredriksen.
Fredriksen is the owner of Golar LNG Ltd.(NSYE: GOL), which operates nine LNG tankers and the company is expected to report a fourfold gain in net income this year.
LNG transportation is going through a boom period as Japanese demand for the product has lead to a third straight year of increased profits for the LNG tanker industry.
Shipments to the Island are soaring to unseen heights after March’s earthquake and tsunami offset roughly 90 percent of the country’s nuclear power, creating an LNG arbitrage between Asian markets and the rest of the world.
Last month Nigerian LNG cost $17.12 per million British thermal units in Japan and $8.87 in the U.K. After transport and re-gasification costs are taken into consideration, total profit for selling gas to Japan was $13.64 on Jan. 31 opposed to $7.17 in the U.K. a profit differential of roughly 93 percent, up 40 percent from 11 months ago.
In the wake of the unprecedented demand, rates for LNG tankers are skyrocketing. Rates rose to $97,630 a day last year from $43,663 in 2010. In 2012 Bloomberg analysts suspect daily rates will reach an average of about $147,000.
Demand for LNG vessels will rise 12 percent this year, as ship owners struggle to keep pace with the growing demand and expansion in supply.
Analysts predict Japan and other Asian cargo shipments will reach record levels this year, with shipments to Japan expanding 3.9 percent to a record-setting 7.9 million metric tons.
At the same time, European demand is expected to decline as the region is still struggling with the escalating debt crisis. North American imports are also expected to decrease because of the increased gas supply coming from deposits trapped in shale rocks.
Golar spokesperson said in a statement released yesterday they believe demand for LNG carriers will remain strong for years to come as new production projects are completed and demand from Japan and China continues to grow.
Fourth-quarter net income for Golar surged to $17.2 million from $4.71 million a year earlier and 2011 profit totaled $46.7 million.
Analyst estimates compiled by Bloomberg predict Golar’s net income will jump $194.2 million this year.
Shares of the company in 2012 have gone up 1.9 percent reaching $50.72, with experts predicting the stock to rise another 7.5 percent in the next 12 months. The stock nearly tripled in 2011, and only two of the 16 analysts whose recommendations on Golar are tracked by Bloomberg advise selling.
Yes, 2012 is indeed turning out to be a great year for John Fredriksen, Russian billionaire.
Until next time,