Thank you for standing by ladies and gentlemen and welcome to the Navigator Holdings Conference Call on the First Quarter 2018 Financial Results. We have with us Mr. David Butters, Chairman, President and Chief Executive Officer; Mr. Niall Nolan, Chief Financial Officer; and Mr. Oeyvind Lindeman, Chief Commercial Officer. At this time, all participants are in a listen-only. There will be a presentation followed by a question-and-answer session. [Operator Instructions] I must advise, this conference is being recorded today. And now, I pass the floor to one of your speakers, Mr. Butters. Please go ahead, sir.

Thank you, Sophie. And good morning and welcome to Navigator’s first quarter 2018 earnings conference call. We will follow today our usual format, with my making a few brief comments and then followed by our financial review by Niall Nolan, our Chief Financial Officer and in turn Oeyvind Lindeman will have some comments regarding the current state of the market. Our first quarter produced mixed results. Operationally, rates and utilization got proceedingly difficult as we went through the year, resulting in a marginally profitable quarter, but a profitable quarter nonetheless. Niall will shortly provide details regarding utilization, charter rates and the implementation of a new set of accounting policies that we along with most of the shipping industry adopted beginning this year. Obviously, these results are disappointing. Moreover, in the short run, we do not see any catalyst that will improve the market and in material way with one exception. That is the completion of Mariner East 2 pipeline. This has been an on again, off again construction project that is nearly three years late, but currently is almost 95% finished. Our best guess is that it will be completed and operational by this year’s third quarter. In the past, I have stressed the importance of this 275,000 barrel a day pipeline, since it will open the East Coast terminal at Marcus Hook to exporting the large LPG volumes trapped in Marcellus and Utica basins. The Marcus Hook terminal with its strategic location on the Delaware River will be an extremely competitive facility with coast proximity to European markets. The good news is that Energy Transfer Partners, the owner of ME2, intends to commence construction of ME3 or ME2X, almost immediately following the opening of ME2 and be operational by mid-2019. Combined, these incremental LPG volumes will have a meaningful…

Thank you, David. Good morning. We are pleased to be able to report a small profit for the first quarter, unlike many of our shipping peers in the LPG sector. The year started, as David mentioned, strongly with utilization around 95% in January and charter rates appearing to be on the increase. This upturn didn’t last with February and March increasingly heading back to levels seen in Q4 of last year. This resulted in revenue for the three months ended March 31st at $77.8 million, similar to the $77.3 million generated during the first quarter of 2017. We generated an additional $5.7 million in revenue, as a result of the additional vessels in our fleet, now at 38 vessels. But this was largely negated by a reduction in charter rates, which reduced to $20,190 per day on average or $614,000 per calendar month for this quarter from $21,712 per day or $660,400 per month for the first quarter of last year. Utilization for the quarter was 91.7% compared to 92.4% for the same quarter last year, but an improvement from the 87.6% achieved during the 12 months of 2017. With effect from January 1st, 2018, we have had to adopt a new U.S. GAAP accounting standard relating to revenue recognition, which changes the way in which we recognize revenue on all our voyage or spot charters. Previously, we like all shipping companies, recognized revenue on a discharge-to-discharge basis in determining the percentage of completion of voyage for voyage charters, whereas since January the 1st, we now have to determine the percentage of completion of voyage charters on a load to discharge basis. This has the effect of increasing our revenue after voyage costs by $1.2 million and increasing our average charter rates from $19,818 per day. This effect, although not…

Thank you, Niall. Good morning, everybody. As you heard, our first quarter utilization came out at 91.7%, an increase from 87% achieved for the previous quarter. And the two main reasons for the uptick came from a continued demand for handysize LPG freight primarily in Europe and Mediterranean during January and February winter months; and secondly, from a slight increase in our time charter contracts for petrochemical cargoes. 15% of our time charter earning days for the quarter came from petrochemicals, this is double the percentage compared to first quarter 2017 and up from zero compared to first quarter 2016. We had a total of four ethane capable vessels committed to ethane trades during the quarter, servicing three different clients in Mexico, Brazil, and Sweden. Our voyage charter earning days for LPG increased slightly to 20% with the remaining 80% from petrochemical trades, as Niall just mentioned. No voyage charter days were concluded in ammonia. We -- as a first, we contracted the first launch handysized propylene cargo to be loaded from Enterprise PDH complex in the U.S. Gulf bound for Europe. The U.S. Gulf propylene deep sea exports have the potential to be an incremental opportunity to the handysize segment. And we expect the trade to continue for the remainder of the year and eventually ramp up in 2019. The propylene exports for U.S. Gulf unlock opportunities for triangulation where we can take advantage of the versatile capabilities across our fleet, transporting seaborne products to the U.S. once discharged with change grade and take C2 [ph] products, be it either ethane or ethylene, or sea C3 propylene out. We have started to see this scenario to materialize and we will continue to work with the various suppliers and customers with the objective to convert to a structural setup. Our time charter covers about 50% for the remainder of the year. And during the quarter, we have successfully concluded the annual extension of two petrochemical contracts of affreightment, which helps to galvanize our contracted earning days. The Clarkson’s 12-month time charter assessment for a handysize semi-refrigerated ship went from $425,000 a month at the beginning of the quarter to $450,000 a month at the end of the quarter. This trend has flattened out and dipped slightly due to decreasing demand for LPG coming out of winter month and today it currently stands of about $440,000 per month.

Thank you, Oeyvind. Thank you, Niall. And Sophie, I think we can open up the call to Q&A period now.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Your first question is from the line of Donald McLee from Berenberg. Your line is now. Please ask your question.

So, with the reemergence of competing ethylene projects, could you, one, comment on what you think the overall scale of the U.S. ethylene export opportunity is, and how both projects might fit in that dynamic? And then, two, has there been any impact from that new terminal, as you’ve negotiated incremental business?

Thank you for that question. Right now, we’re not seeing much in the way of pushback at all from that particular terminal. The question is -- the fundamental question that you raised is, what is the ultimate demand for U.S. ethylene out of the United States, particularly contracted on the long-term basis. Currently, any barrels that we could possibly get, will be sold, because there is an enormous, usually strong spread between U.S. ethylene pricing and international pricing. And that’s of course, as I’ve said in the opening remarks is -- totally is a result of very cheap hydrocarbons. The spread is so great that it’s probably non-sustainable and it always -- for the last five to six years, it has been quite good, but it’s enormous right now. I think, if I could quote current numbers, you can buy a ton of ethylene today in the United States for approximately $300 a ton. International markets are anywhere between $1,200 and $1,400 a ton. This is quite an incredible spread, considering the cost of transportation terminalling and so on is probably in the area depending on where it’s going, $300, $350 a ton. So, you would say on the face of it, you could sell every molecule; you could get sell every molecule, you could get your hand on. But, really, the fundamental reason or issue will be how long a contract, and that’s what we are after, long-term contracts, how long can you get contracts for to sustain the coverage on your plans. Right now, we’re making good progress. I think, it will accelerate once we can finalize some decisions we have to make on our own terminal which are about ready to be completed. We have not -- in spite of some decisions not being finalized, we are not stopping whatsoever in the design and planning of that facility. So, that as I mentioned in the opening remarks, we are actually moving it quicker. We hope to get up and run this operation in Texas by the end of the fourth quarter -- in the fourth quarter of 2019. But to answer your question more directly, we’re not running into any resistance or any competitive backlash from the Nova/ETP. But of course they haven’t made a final decision. They just announced that they were investigating it. Again, it reflects strong interest, these wide margins and the outlook that U.S. ethane and U.S. ethylene will be under-priced throughout the world and have strong competitive features to it.

Do you think there’s a chance that some of the older competing products might reemerge, given that price dynamic and the level of demand?

Listen, I cannot tell you, if they will emerge. We have the ability to expand our own facility, if that demand emerges to in excess of what we’re currently building. And part me of says I love it because we’ve got the vessels to move it and the more terminals and the more output and the more product available for export, the greater the demand for our vessels. On the other hand, we own, co-own a very important facility that we intend to lease out almost completely before it gets up and running.

Got it. And then, just one more and I’ll -- sorry.

We’re terribly happy with the progress we’re making on that hold ethylene export, terribly happy.

Got it. Then, I have one more before I turn it over, just on the $10 million capital contribution. Can you maybe give some color on what your aggregate capital contribution would be for the terminal or alternatively maybe where the terminal stands in terms of a percentage of completion?

So, $10 million was just the initial -- both of us made $10 million contribution to begin the process, and that covers a lot of the engineering work we’re doing, the planning and so on. We are -- at the moment, we’re in the process of design and getting quotes for the construction. Once those numbers are in, which we expect within the next 30 days, I think, we’ll have a better fix on the total overall cost. And my guess is that it will come in under $400 million, but we haven’t come out with any specific cost estimates yet. But, that’s kind of from what I could understand, from other competitive talk in the past, that’s kind of what the -- export terminal would run. But, so, there is no real percentage of completion at the moment. It’s just design work, requests for bids, that sort of things that are coming in. And 30 days from now, we’ll have a better fix on the overall cost.

Got It. I appreciate you taking my questions, and thanks.

Thank you, Donald.

Next question is from the line of Jon Chappell with Evercore. Please ask your question.

Just back to follow up on that last one, maybe ask it a different way. Just as we try to think about the capital outflows as this project develops, and I understand that the final total is a moving target right now. But, what would you imagine would be the capital outflows this year? And should we think about this as kind of like shipping payment or it’s kind of front-end loaded, a little bit with some down payment, but then a big bullet at the end or would this be more whatever the cost ends up being you’re just spreading from now until startup in late 2019?

Sure. And it’s a fair question. The way we have looked at in the past, the numbers we have been presented and kicked around Jonathan is that it’s pretty evenly spread throughout the 18 months or so construction period. However, there is a back-loaded number because the big cost happens to be evolving in the storage facility. That’s where a lot of welding, a lot of metal goes in. Everything else can be manufactured offsite, being brought in and assembled. But, the steelwork, the storage will probably come in three or four months after the initial operation. What we are able to do by the fourth quarter of 2019 is once that refrigeration unit is up and running, we can start to ship, load vessels through the refrigeration unit. Once the storage is complete, maybe two months or three months later, then product will move from the refrigeration unit, the chiller, into the storage and from the storage into the ship, which will enable us to load a vessel in less than a day. That’s the objective. That will happen sometime between the end of 2019, fourth quarter of 2019 and the first quarter of 2020. But, so, there is a little skewing to the end of the period, to accommodate that heavy expenditure on the storage. But otherwise, it’s fairly evenly spread.

Okay. And then, just one more on the terminal. I understand that you have about 50% of the offtake filled in and you probably wait to finalize the financing, so maybe have a little bit more than that. But could you just kind of help us think through kind of next steps? Is it, do you have to get more offtake then the financing? Can you do financing for the offtake? And then also as it relates to you specifically in the other part of your business, your core business really, when does the kind of the shipping component of the offtake get finalized? Is that after the startup or is that something that needs to be done before the first cargo is lifted?

Sure. Niall, why don’t you take that?

Okay. I think there’s a couple of minor hurdles still to go on the terminal itself, but I think they’ll be -- well, we’re expecting those to -- these are more legal hurdles, but I think they’ll be resolved in the next number of weeks. There is no further commercial subjects, if you like, on terminal and what happens next. So, I think that process is already -- has already happened. And I think, as David mentioned on the last earnings call, we have these two parties who are committed for just under the 50% et cetera, et cetera. So, it’s a done deal.

But the way it will work, way we’re shooting for, Jonathan, is that it would be done on as a project finance. It’s going to be based upon security of the cash flows coming off of those contracts. There is already with the amount of contracts that we have, a substantial ability to borrow directly off of this number that is not even close to capacity. And it will be done a variety of ways, but probably it’s going to be non-recourse, but just as a project. And we have a combination of parties’ interested banks, infrastructure funds and private equity, all who like to participate. And it’ll also be done Jonathan on a construction basis. Draw-downs can be scale, so that as you need it, you will get it and it goes on. So, we don’t anticipate anything dramatic. We don’t anticipate any equity required by Navigator to support the construction. It’s just -- the more percentage capacity committed to the terminal, but more attractive financing is attainable, that is simple; that’s finance one-o-one. And so, that’s why we’re moving the we are.

Okay. And just one more if I may. And you mentioned in the 6-K, the slump in the business in March associated with the markets look force majeure. Is there any way to quantify what that might have been in millions of dollars? And then, also -- not even in millions of dollars, anyway you can quantify it just so we can have something around. And then, did that extend into April or even further? And how should we think about potential impact of that on the second quarter?

Good question, Jon. I think it was early March that declared force majeure on Mariner East 1 because of the sinkholes and so forth. And we checked this morning with the local agents over there. And there is a ship outside expecting to load tomorrow. So, but to understand [ph] things, it looks like they are up and running again and can commence exporting what they used to before the force majeure.

Okay.

But of course during that period, the ships that have done offtake agreements or the customers that offtake agreement, either -- obviously they didn’t get the volume there, so they were turning [ph] around or they have to sail somewhere else to find collar. So, it did have a big influence on the handysize, a little bit some of the ethane shipped that were supposed to load. However, they were idle in the North Sea and of course taking cargos that they wouldn’t otherwise be interested in. So, overall a slight negative but things back up and running now, I think.

Okay. But just simplistically probably impacted a third of the first quarter and maybe half of the second quarter, but now kind of going forward we’re back to status quo?

Yes. That’s right. So, I think it was on the International Women’s Day, 8th of March that they declared force majeure.

Your next question is from the line of Michael Webber from Wells Fargo. Please ask your question.

Good morning, Mike. Hi, Mike. You may be on mute.

Yes. Hey, guys. Sorry about that. Hey, David. I don’t want to make this all about the terminal, but I do want to just make sure I’m clear on a couple things. In terms of where the project stands now, you guys have allocated capital towards speed work to actually FID the project. Can you walk us through the actual contingency associated with actually getting to a firm commitment?

Well, we have, in spite of not using the word FID, because we haven’t specifically firmed the location. However, we have contracted throughput with offtakers. So, a terminal owned by Energy Transfer Partners -- Enterprise Product Partners and Navigator will in fact be built. So we’ve committed to do that. We are just adjusting to and finalizing good location to be the most efficient place to put it. That decision hopefully will be made in -- within the next two to three weeks. But, we are organizing the engineering, negotiating with the contractors, and all of that should be available to us within the next 30 days. And I don’t think it’s slowed anything in the way -- in fact, what I’ve pointed out, we are ahead of schedule. So, we fully intend to get this thing up and operational in 2019 and not 2020, as we originally planned.

Sure. Yes. I know it’s just bit of a different one and kind of normal [ph] timeline that we’re bringing. So, I just wanted to make sure we’re clear on that. When you referred the two anchor buyers, and I know in the past you talked about the fact that -- what gets you excited about the project is not the fact you get to two buyers, but it’s kind of the strength of the pipeline behind it and the ability [technical difficulty]. What do those buyers need to see in order to step in and commit to different volumes? So, maybe about the rest of the commercial process, what’s the biggest variable there you think in there?

There are none; they’ve committed. They’ve done.

For the remainder?

For the remainder, I think there is this element, because we have not announced a precise location of the facility, I think there’s some unwarranted, uncertainty, if you will about whether the project is moving forward. I’ve heard this, a number of potential customers and they said let’s wait until you’ve decided. Well, we have decided we are going to build the terminal, period. And we’ve got commitments and we’re moving forward. There’s just no issue. So, I think it’s that element of -- we’re going to tie it down, we want to put it through. We’re negotiating with some of the suppliers of the ethylene. So, yes, I think it will all fall in place within the next couple of months. And I don’t hesitate to be convinced and say that this thing is going to be wrapped up by mid-year.

Got you. Okay. That’s helpful. Just one more and I’ll turn it over. And Niall, you mentioned you get term sheets now predicated on roughly 50% coverage. Can you give us a vague sense on maybe [technical difficulty] there, pretty wide range, just to get a sense on what the project would look like right now [technical difficulty] perspective…

I’m sorry, I can’t -- your line is very poor. I didn’t get that. Put some perspective on what?

A big chunk of the cost of the capital, you guys in terms of the term sheet you guys are looking at the project right now?

I don’t think we’re in a position to do that right now. We’ve obviously got some competing term sheets. And I think it would be inappropriate to start giving information away from one to the other. Let’s determine which way we’re going first, before we do that. You’ll understand.

Next question is from the line of Randy Giveans from Jefferies. Your line is now open.

Hey. Thanks and good morning and congrats on another profitable quarter in the challenging market. So, two quick questions. One, just to be clear, sorry for beating the dead horse on the enterprise export terminal. Do you expect Navigator to sign any firm contracts to ship some or all of that 1 million tons per annum in the next year?

Well, it is -- the joint venture will sign contracts to terminal ethylene. Okay. So, it may be at the people’s ethylene that we terminal, but we’re doing the physical transfer and storage in our facility. That’s what we will do. Now, the ethylene may be purchased directly from the producer by the buyer of the ethylene and then execute a contract for the terminalling through the joint venture with enterprise here. That’s how that will work. So, we don’t sell ethylene ourselves. What we will do and when we’ll execute within the next period of time is execute on the transportation of that ethylene. And that we expect to firm up, within the -- again, by mid-year we should have something.

We have, I mean, if you were on the call last quarter, the same question was asked and we confirmed that we have one contract for ethylene shipments or Navigator shipping ethylene on our ships. But because of confidentiality, we couldn’t say much more on that. But of course it’s tied in with the timing and the opening of the terminal.

I’ll just point out, Randy, that this ethylene production is going to be commencing at the fourth quarter of 2019 and ship availability for this type of -- the type of vessel required is going to be very tight. So, if you want to move your ethylene, you better be signing up fairly quickly with us or you’re going to miss the boat, literally.

Second, with that, do you expect to order or need to order any newbuildings to service that project or is your kind of current fleet fully capable, no needs for new more?

We want employee all of our existing fleet on long-term basis before we would even think about new vessels. And any new vessels that we would contemplate would be done with securing long-term contracts against those new construction. I don’t think the industry needs to have any new tonnage around. I think that’s been the fault of the shipping industry historically and probably will continue. So, we want to take a very prudent, very focus, very rightful shot approach here. New construction will be based upon new contracts.

And then, for the Energy Transfer 1.5 million ton per annum, ethane export project. How much of that could you possibly move on your current fleet or do you think all of that goes on the OECs? [Ph]

By far, that stuff will be moved on very large ethane carriers. The economies of scale are such that a very large ethane carrier would be required. Number two -- would be a real advantage. Number two, it’s long-term contracts. Those contracts are going to be supply contracts of 10 years. And it’s point A to point B. So, you wouldn’t think about anything else, but constructing new vessels of the very largest nature.

And is that something that Navigator will be getting into possibly?

Well, we are and have been involved in discussions with all parties regarding that. There is an issue about the price of the vessels. There is an issue about availability of shipyard capacity. But, we’re engaged. Let’s just put it that way. We’re deeply engaged in that discussion. But, we have not concluded any contracts, whether for construction of vessels or in shipping, at this point.

Lastly, just a quick modeling question. Remaining 2018 drydocking, is it still 6 vessels, $8 million, and then what about 2019?

It’s 4 vessels at $3.8 million having done 2 so far this year. And next year, ‘19 is 8 vessels at around the $8 million mark.

Your next question is from the line of Ben Nolan from Stifel. Your line is now open. Please ask your question.

So, I wanted to follow up on something you were just talking about, David, with respect to shipyard capacity. Obviously, your terminal is going to require some tonnage and you’d hope to use the existing fleet shipping infrastructure to accommodate that first. But, I think, depending on depending on how the numbers shake out, you are going to run out of ethylene capable vessels pretty quickly. And then, there’s other stuff behind it whether Energy Transfer moves forward with their ethylene terminal, and ethane and everything else. Could you maybe help me frame in, how you think about the actual ability of the market in terms of ship building capacity and so forth to meet these potential requirements?

Sure. And I think that’s a very timely and apt question, Ben. Shipyard capacity for this type of vessel is tight. These are ethylene capable LPG vessels. But particularly when you get into the ethylene, ethane type of vessel, they’re complex to build. Number two, it’s not a huge a market. So, you’re not attracting every shipyard available to build these things. You need good engineering, you need a design. So, it’s not going to attract a whole crowd of shipyard builders -- ship builders. We’ve surveyed just about every yard in Korea or in Japan, in China about delivering these vessels, six vessels or handysize vessels or midsize vessels, and to meet the needs of potential importers of ethane, principally the Asian petrochemical companies. There is a real question about the ability to deliver those vessels on a timeline that they would expect to get delivered. Something has to give. So projects are either going to be delayed or combined or coordinated. I’m not sure when I say coordinated and combined, I think some of the Chinese yards must get together to see how they can support a construction program that will meet the demands of the petrochemical -- Chinese petrochemical business. Again, what we understand, what we know, what we’ve been talking about with the potential customers is that they need to acquire U.S. feedstock, ethane feedstock. They need to do it because of the economics; the price advantage is enormous. And secondly, there is a great deal of pressure upon the Chinese government to -- whatever incremental businesses that they’re doing, to do it in the cleanest way as far as the environment is concerned. And ethane is a pure burning feedstock, and that’s clearly preferred over oil. So, there is a great deal of interest. And it’s interest that’s coming at the same time. It’s not going to be huge, but it’s all coming at this point in time in 2020, 2021 and there is just not enough, efficient capacity to meet them. So, how it gets all worked out? I’m not sure. I think, we believe that most of the ships will have to be built in China because this is a one road one built product that would be China built. Some vessels will be able to be built in Korea and we’ll see some of that. But shipyard capacity for this type of specialized vessel is an issue. And that’s maybe a stumbling block, but it’s a workable stumbling block. And I’ve seen in the past the shipyards somehow find capacity one way or another. And that will happen. But right now, it’s not clear, quite frankly. And I know that the price has been risen because of the cost of steel, and nickel has been driven up. And so, the costs of these vessels are going up.

Okay.

And not a very clear answer to your question, but I just want to highlight that it is a serious question and one that we’re struggling with ourselves.

Right, which is what I heard and why I asked [technical difficulty] looking at both the terminal capital ,required whatever that might end up being as well as potentially any other CapEx that might come to -- or be needed to build ships to service this blow of volumes, maybe not. Could you maybe walk me through what you sort of see as your current dry powder or war chest, and how much you feel like you have available to you to meet this?

Well, look, first of all, our focus right now is the project in hand and that’s financing the ethylene terminal. And as Niall pointed out, we have a number of avenues that we’re pursuing, attractive avenues that can produce the financing that we need and done on a basically a non-recourse basis because we want as much powder dry as we possibly can handle or get. Because so many projects are floating around relating to the infrastructure required to meet the exports of petrochemicals coming out of the U.S. Ethane is just one of them. The ethane presents a challenge because as we point out that these projects are large scale, requiring large vessels and the large vessels are a 100 plus million dollars each. And it takes deep pockets to do that. We are coming up with various ways that if we are lucky enough to secure the kind of contracts we want on a long-term basis that we will go in and finance these things. We can do that hopefully on a project basis, securing outside financing on hopefully non-recourse requiring little equity on the part of Navigator. But we’re talking, if these projects, particularly on the ethane for getting the other infrastructure projects that we’re looking at, ethane alone, that could be a $3 billion, $4 billion ship building project. That’s a lot of money. And it means a little bit, a lot of deep pockets to get that done. But the good news is most of it will be done on long-term contracts, very focused and it will take time to develop. But, lots of issues, it’s not an easy thing.

Okay. And then, lastly for me, just switching gears maybe a little bit, Oeyvind. Obviously, this week there was President Trump backing out of the Iran deal. I know in the past, we’ve talked about Iran potentially being a much bigger player and the exporter of LPG and petrochemicals. Just curious where that stands and if there is much of any exposure as an industry to disruption?

I think, the guys who have been doing it for the last few years will continue to do it despite what’s happening. Generally, it’s Far Eastern, South Eastern Asian players and it can take it away shipping from Iran to China and Taiwan and so forth. So, I think you won’t see less traffic or less volume on those ships. So, I think it will be same as what we have seen on last few years, so no big change. I don’t think it will reduce.

The only place it could reduce, Ben, is if the Iranian petrochemical industry does not get access the capital to expand the way they had planned to expand, down the road, you won’t see as much exports. That’s the worry that they have, that’s the worry about a conflict in the Mid-East, conflicts are never good. And higher prices, it’s great right now, but it comes to bite you later on.

Your next question is from the line of James Jang from Maxim Group. Your line is now open. Please ask you question.

So, I just have a follow-up question. So with Mariner East 1 operational now and Mariner East 2, there fines being imposed and so should be delayed a bit. What is the status for Mariner East 3 then? Do you think that it won’t pass and that this will probably be -- sort of pipeline is going to Marcus Hook?

No. Mariner East 2 will get done; it’s almost done now within striking distance of completion of that line. But, the important point on Mariner East 3, and this is very important point that the way they built Mariner East 2 was to core for the pipeline underneath every road, every river. And in the process, they cored two hosts, one from Mariner East 2, which they in fact have laid the line now, the pipe is in on Mariner East 2, the 95% of the line. But all the infrastructure for Mariner East 3 is the core and they’ve lined them. So that when Mariner East 2 is completed, they do not have to go back and get permits for every crossing that they have done. There was something like 298 permits that they hand to get to build Mariner East 2. So, when they were getting them, they got them from Mariner East 3. So, they got permits to 2 core holes, 2 parallel holes under every road and every river. So, now the advantage is, when the year go back after they complete Mariner East 2, they can just under cover the top soil and everything is already permitted in lane number three. Now, it’s obvious that if you are energy transfer partners and you have the opportunity to build that, you are not waiting any time, you’re going to go in and build that as promptly as possible, because you’ve got the permits. And you don’t want anything to change. So, they will be -- they will be aggressive in going after and completing Mariner East 3 once they have to complete it.

Do you think with the Mariner East 2 also being fined for I think there were some leaks or I think they skirted some rules on near the lakes and rivers, do you think the regulatory approval will actually go through from Mariner East 3 or do you think the public…

No, no. That’s the point, James. They’ve got the permits. And the wells, the holes have already been drilled. So, they don’t have to go in for the 292 permits they had to get for Mariner East 2. It’s all done.

Okay.

So, that’s the absolutely key to why Mariner East 3 can get done on time without the delays. There is no drilling -- no horizontal drilling needed. It’s all done. So, all they have to do is lay in the pipe; that’s all they have to do for Mariner East 3.

Okay. So, do you have an idea of when we can start to see volumes from Mariner East 3 coming on, like when are they going to start construction?

Well, let’s assume -- let’s make some assumptions that Mariner East 2 gets done this summer. Then, Mariner East 3 can be done in their estimates12 months to 16 months following the completion of Mariner East 2. So, once they begin, all they have to do is take off from that overlay of dirt and lay number -- the pipe for number three. So, it’s just a matter of pulling it through at maybe in a cost of a $1.2 billion or $1.3 billion to get it done, but they’re not going to waste time on getting there. So, the important thing is you’re going to -- potentially seeing by the end of 2019 if all goes well, something like 600,000 barrels a day of LPG going into Marcus Hook and being shipped out. That’s an enormous amount of product, and it will influence pricing and it will be great for all the carriers.

Okay, great. Thanks for that. And then moving on to -- on the fleet. So, can you give us an update on the charter status, so that ones that -- or the vessels that due to come off this month or next month?

Yes. As we mentioned earlier, have right at this moment or at least at the end of first quarter, the coverage for the year stood at 50%. So typically in our handysize market, the various time charters are 12 months or less, at least in LPG. At various point in time, there’ll also be negotiation, typically the things. So, we’re working on various ships that are coming for renegotiations as they come. So, we’re not sitting still, some of them have -- some are still in the pipeline, but it’s a very ongoing process week by week.

Okay, great. Yes. That’s all I had. Thank you, guys.

Thank you. And Sophie, I think we’ve reached our time limit. So, I’d like to just say thank you all for joining us this morning. And hopefully, we have something interesting to talk about in the next three months.

And that does conclude your conference call for today. Thank you for participating. You may all now disconnect.