AVANCE GAS will pay a $268m dividend for 3Q24 and wind down its business, after it sold its last four medium-sized gas carrier newbuildings to Exmar for $282.4m, or $70.6m per ship.

The John Fredriksen-owned gas carrier owner earlier sold its 12 very large gas carriers to BW LPG for $1.1bn and said it would reward shareholders rather than chase growth.

Avance Gas expects a profit from the Exmar sale of $34m and cash release of $84m, plus refund of $50m in yard payments.

Chief executive Oystein Kalleklev said the deal makes “perfect industrial sense” given Exmar’s size and specialty in medium-sized gas carriers.

Kalleklev said the deal showed Avance’s “willingness to take part in industrial consolidation where we put industrial logic and shareholder value creation ahead of growth”.

“As we are not planning to invest in new ships, we are now preparing a wind-up process of Avance Gas to ensure we can return the remaining capital to our shareholders in a quick and cost-efficient manner,” he said.

“We want to thank everyone for this fantastic journey.”

Avance is exiting as rates for its ships soften, despite strong arbitrage to be had from carrying gas from the US Gulf to Japan.

Its average time charter equivalent earnings fell to $45.6m in the third quarter, from $50.9m the previous quarter. Net profit slumped to $25.8m from $60.6m.

Average TCE rates slumped to $33,700 per day, from $56,600 per day the prior quarter as hurricane and terminal maintenance in the US reduced VLGC liftings and the return to normal of Panama Canal traffic reduced tonne-mile demand, leaving ships unemployed during the quarter.

Hurricane Beryl hit US exports in July, when a surge of VLGCs reached the US Gulf coast from the Panama Canal and Cape of Good Hope, sending the number of available ships up three to four times above the five-year historical average for that time of year.

Spot rates fell below cash break-even levels by the end of the quarter despite record-high lifting volumes in August.

US-China price arbitrage jumped to $240 per tonne from an average of $166 per tonne amid strong LPG demand from Asia and higher volumes out of the US.

But terminal slot owners and cargo owners captured more of the profit from the arbitrage trade, as terminal fees averaged $0.30 per gallon in September, compared with an average $0.06 per gallon from 2021-2023.

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