Company: DLNG
Filing Date: 2025-04-10
Form Type: 20-F
Source: 0001104659-25-033744
Chunk: 9

Company: Dynagas LNG Partners LP
Filing Date: 2025-04-10
Form: 20-F
Item: Item 3
Chunk 9
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, $0.11 billion of which is a variable hire element contained in certain time charter contracts with Yamal. The hire rate on these time charter contracts with Yamal is calculated based on two components - a capital cost component and an operating cost component. The capital cost component is a fixed daily amount. The daily amount of the operating cost component, which is intended to pass the operating costs of the vessel to the charterer in their entirety including dry-docking costs, is set annually and adjusted at the end of each year to compensate us for the actual costs we incur in operating the vessel. Dry-docking expenses are budgeted in advance within the year of the dry-dock and are reimbursed by Yamal immediately following a dry-docking. The actual amount of revenues earned in respect of such variable hire rate may therefore differ from the amounts included in the revenue backlog estimate, which is calculated based on the budget agreed at the inception of the contract, due to the yearly variations in the respective vessels’ operating costs.

Notwithstanding our current estimated contracted backlog, one of our principal objectives is, wherever possible to enter into additional multi-year time charters upon the expiration or early termination of our existing charter arrangements, and we may also seek, wherever possible, to enter into additional multi-year time charter contracts in connection with an expansion of our Fleet. The process of obtaining multi-year charters for LNG carriers is highly competitive and generally involves an intensive screening procedure and competitive bids, which often extends for several months. We believe LNG carrier time charters are awarded based upon a variety of factors relating to the ship and the ship operator, including:

  size, age, technical specifications and condition of the ship;  

  efficiency of ship operation and reputation for operation of highly specialized vessels;  

  LNG shipping experience and quality of ship operations;  

  shipping industry relationships and reputation for customer service;  

  technical ability and reputation for operation of highly specialized ships;  

  quality and experience of officers and crew;  

  safety record;  

  the ability to finance ships at competitive rates and financial stability generally;  

  relationships with shipyards and the ability to get suitable berths;  

  its willingness to assume operational risks;  

  construction management experience, including the ability to obtain on-time delivery of new ships according to customer specifications; and  

  competitiveness of the bid in terms of overall price.  

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We expect substantial competition for providing marine transportation services for potential LNG projects from a number of experienced companies, including other independent ship owners as well as