Seapeak pondering sale of three newly laid up steam LNG carriers

Seapeak Maritime, an independent owner-operator of liquefied natural gas (LNG) vessels, is considering selling three steam-turbine LNG carriers from its fleet that are in lay up.

As disclosed in Seapeak’s annual report, three steam turbine LNG carriers–out of seven from its fleet–were placed in layup in early 2025. The remaining four are scheduled to complete their long-term charter contracts between late 2026 and mid-2029.

“We have made downward revisions to the outlook for this class of older vessels based on a combination of an oversupply of this type of vessel and reduced charterer interest due to their less efficient design,” noted Seapeak.

This prompted the company to reduce the future hire rate forecast of these vessels and decrease the estimate of their useful lives by ten years, from 35 to 25. Seapeak also said that these vessels are now more likely to be sold in 2025.

Due to these changes, the carrying values of these vessels were written down to their estimated fair values in December 2024, resulting in an impairment charge of $387.1 million, the company further stated.

Additionally, LNG project delays have caused a near-term oversupply of LNG carriers which the operator believes could hurt its 2025 results. More specifically, some LNG carriers may be left without charter contracts in 2025, while others could be rechartered at rates lower than during their previous contracts.

While this is unfortunate for operators, it is in line with the analysis of the LNG market trends in the first half of 2024 and predictions for the upcoming period by Norway’s Awilco from August 2024.

The Norwegian firm argued that the high number of deliveries for the next three years–with newbuilding vessels expected to replace some of the two-decade-old smaller steam vessels–in combination with limited new LNG production expected on stream until the second half of 2025 may point to a challenging period ahead unless the vessels’ efficiency increases.