Weekly Gas Report - 26 «Nothing is impossible, the word itself says 'I'm possible'! »

Market Comments VLGC

The VLGC segment saw a decrease in activity this week and the Baltic Index softened slightly. As a result, earnings to owners is about US $ 16,000 per day, well below breakeven level for a modern VLGC vessel. IOC entered the market with two spot requirements on 11-12 July and 19 July dates ex MEG, both being fixed/put on subs at premium levels compared to the Baltic Index. We expect two further end-July Indian spot requirements which would bring the total Indian VLGC spot fixtures for July to six. In the product market it has been reported that one spot FOB cargo from a Middle East producer has been sold to a trader. There are also expectations in the market of further potential July spot cargoes for sale in the Middle East Gulf which could help to balance the shipping length seen in second half of the month in the area.

NH3

Ammonia prices fell further this week on a softer market outlook, as capacity increased with the Sorfert ammonia plant in Algeria coming back online after a one-month downturn. A falling price-picture was also confirmed by new spot deals concluded, including an import tender in Indonesia. Buyers are taking a more bearish view on the market, as the summer months bring a slower trading period. The line-up out of the Black Sea came in at HIGHLIGHTS 265,600 tons in June, and stands at 196,700 tons for July already. The Black Sea market is also softer this week, as VLGC: decrease in shown by the Gaschem Stade chartered for a single voyactivity, Baltic Inage lifting Russian ammonia via Dreymoor to buyers PPL dex softening and CIL in West Coast India, at a reported Yuzhnny netback price of US$250/ton fob. Data released from the Ministry of Energy and Energy Affairs of Trinidad and Ammonia: Prices Tobago shows ammonia production in the period January falling on soften-April to have increased by 1.8% on the same period last ing outlook With continued closed arbitrage from US to East dis- year. Additionally, Trinidad export figures for April 2016 charge ports, there has naturally been few fixtures con- were up 14% year on year. Handy: Slowing cluded and a handful of term contract holders have so far Handy activity in the west confirmed to have cancelled their liftings in July. If the Activity in the Western Handysize market has taken a current market situation persists, we expect more cancel- step back from last week, with relatively few enquiries in lations to follow soon. On a positive note, we have seen the market and no fixtures reported. The unattractive US Coaster: Length the 1st VLGC’s passing through the new expanded Panaremaining despite ma Canal successfully this week and several more ships to Europe arbitrage continues to dampen the mood in the market and charterers have numerous freight options activity increase are planned for transiting in the weeks ahead. This will on both side of the Atlantic on forward and prompt basis. without doubt shorten the tonne-mile demand for the Going forwards the activity needs to see an upturn to global fleet and a voyage from US to Far East is reduced keep freight rates even at current levels. by around two weeks sailing time. It does however remain to be seen how much negative effect this will have Coaster on freight markets in the long run. The North West Europe coaster market has seen some increased interest this week with a good flow of quoted Utilization rates for the global fleet looks very healthy and cargos. That being said, there is still some length causing in any other comparable segment of shipping, freight mar- rates to remain relatively low and under downward preskets would most likely be booming with these high em- sure. Looking at the Mediterranean and the Black Sea the ployment rates. Newbuildings delivered so far this year activity has been subdued causing continued length and have clearly been absorbed by the market, but there is for some players in the area long idle times. The low level still a large amount of ships left to be delivered during 2H of activity leads to many traders being covered on their 2016… own controlled, which again partly explains the low spot demand.

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Weekly Gas Report - 26 LPG Propane demand remained low in the North West Europe market on ample supply from the US Gulf and West Africa. Sonatrach announced its July loading prices to be at US$290/t for propane and US$310/t for butane, indicating stronger competition between US cargoes and LPG: Weak demand region cargoes. Butane cargoes continue to see firm decontinues in Europe mand with prices pegged at high 70% of naphtha. and Asia eyes more spot cargoes from In the Middle East, Saudi Aramco announced the July middle east CP at US$295/t for propane and US$310/t for butane, slightly below market expectations. Saudi Aramco is reported to have sold a 22/22 ratio end July FOB cargo to a western trader at a price of US$305 propane/US$320 butane. There are still FOB cargoes to be offered for July dates, attracting buyers interest. With the falling freight market, these FOB cargoes will continue to attract more buyers compared to US cargoes.

for propane. In the US, Mont Belvieu prices continue to stay firm with at least 4 cargoes being cancelled for July loading, contributing to build up US inventory levels. A buildup in stocks together with the Panama Canal now being open, is likely to attract Far East buyers.

Weak demand continued in the Asian LPG market. A deal of 22kt propane cargo delivery 2H July was concluded in the window at Aug FEI-US$18/mt. We might see improved trading liquidity as soon as the market turns to contango in Aug/Sept. The August CP swap is at US$307

LNG Chinese LNG imports for May rose 27.3 per cent to 1.43 million mt in May y-o-y, according to the General Administration of Customs data. A total of 13 LNG terminals were in operation at the end of 2015, operating at an average annual utilization of about 50 per cent. The Conoco Philips led LNG project in Australia Pacific shipped its first liquefied natural gas cargo to Kansai Electric Power of Japan, from its Curtis Island Facility this week. Kansai Electric has agreed to a 20-year sale and purchase agreement of 1 million tons of LNG yearly with APLNG. The agreement was signed back in 2012.

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Weekly Gas Report - 26 FIXTURES SPOT Vessel CAPTAIN MARKOS NI BW TRADER KIKYO IRIS GLORY SHELL TBN KOBAI OOS GOVIKEN EPIC CALEDONIA GAS LEGACY

Built 2006 2006 2010 2008 NA 2009 2007 2014 1998

Cbm 80633 78631 80783 81995 NA 80781 3300 3500 3500

Qty 44' 44' 44' 44' 44' 44' 1'6 1'8 1'6

Cargo LPG LPG LPG LPG LPG LPG BUTANE BUTANE PROPANE

Load HOUSTON MAA NEDERLAND MEG MEG MEG FREDERICIA ROTTERDAM PEMBROKE

Disch BRAZIL INDIA OPTS OPTS EAST INDIA ARA OPTS OPTS

Laycan 13-14 JULY 11-12 JULY PROMPT 12-13 JULY 10-11 JULY 19 JULY 2-4 JULY 2-4 JULY 4-5 JULY

Rate US$ 27 bss H/F 990k LS BSS 1:2 50 BSS CHIBA BALTIC AVERAGE RNR 949K LS BSS 1:2 RNR RNR RNR

Charterer PETROBRAS IOC SHELL SHELL SK GAS IOC STASCO EXXON SHV

RATES Baltic Exchange LPG Index 44’LPG Ras Tanura/Chiba Weekly Baltic average Baltic TC Equivalent

(US$/pmt) (US$/pcm) (US$/pd)

Last Week 27.63 527 332 17 335

This Week 27.00 504 635 16 589

Trend Softening Softening Softening

12 months Time Charter - Indicators

3.200 cbm S/R 3.500 cbm P/R - East 3.500 cbm P/R - West 5.000 cbm P/R 6.500 cbm S/R 10.000 cbm ETH 20.000 cbm S/R 35.000 cbm 60.000 cbm 82.000 cbm

Last Week (US$/pd) 7 396 5 424 5 588 7 396 12 163 17 423 21 368 21 368 21 368 22 189

This Week (US$/pd) 7 396 5 424 5 588 7 396 12 163 17 423 21 368 21 368 21 368 22 189

This Week (US$/pcm) 225 000 165 000 170 000 225 000 370 000 530 000 650 000 650 000 650 000 675 000

Trend Steady Steady Steady Steady Steady Steady Steady Steady Steady Steady

VALUATIONS We provide expertise valuations for a number of ship owning and banking clients worldwide, covering all types of gas carriers either on a regular basis (quarterly, semi-annually) or on an ad hoc basis. Our experienced team is fully updated on the latest secondhand and newbuilding price trends and maintain a comprehensive database with historical prices. We strive to maintain an unbiased approach to valuations, which are carried out in due diligence and in accordance with established ISO procedures. 3

Weekly Gas Report - 26 PRODUCTS & PRICES

LPG, Natgas, Crude, IFO380 NWE FOB ARA Small US Mt Belvieu Non-LST MEG Contract Price Japan CFR NG, Crude & IFO380 NG, NYMEX WTI, Light Crude - NYMEX IFO380, Fujairah

Propane US$/pmt

Change from last week

Butane US$/pmt

Change from last week

311.0

4.8%

313.0

1.6%

272.3

3.0%

306.4

3.5%

295.0 326.0

-10.5% -2.5%

310.0 334.0

-15.1% -3.3%

2.95 48.38 258.50

9.64 % 1.45 % 2.51 %

US$/mmbtu US$/bbl US$/pmt

Name Brokers Anders Lalim Katie Du Sebastian Isaksen Eirik Schøne Ness Henrik Konow Verlo Research Knut Stangebye Olsen Operation Håvard Teigland Spyros Bampetas

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Weekly Gas Report - 26

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