Thank you for standing by, ladies and gentlemen, and welcome to the Dynagas LNG Partners conference call on the Q2 2022 financial results. We have with us Mr. Tony Lauritzen, Chief Executive Officer, and Mr. Michael Gregos, Chief Financial Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. At which time, if you would like to ask a question, please press star one on your telephone keypad and wait for the automated message advising your line is open. I must advise you that this conference call is being recorded today. Please be reminded that the company announced its results with a press release that has been publicly distributed. At this time, I would like to remind everyone that in today's presentation and conference call, Dynagas LNG Partners will be making forward-looking statements.
These statements are within the meaning of the federal securities laws. This conference call and slide presentation of the webcast contains certain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. The statements in today's conference call that are not historical facts include, among other things, the expected financial performance of Dynagas LNG Partners business, Dynagas LNG Partners ability to pursue growth opportunities, Dynagas LNG Partners expectations or objectives regarding future and market charter rate expectations, and in particular, the effects of COVID-19 on the financial condition and operations of Dynagas LNG Partners and the LNG industry in general, may be forward-looking statements such as defined in Section 21E of the Securities Exchange Act of 1934 as amended.
Matters discussed may be forward-looking statements which are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. I kindly draw your attention to slide two of the webcast presentation, which has a full forward-looking statement, and the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. Now I pass the floor to Mr. Lauritzen. Please go ahead, sir.
Morning, everyone, and thank you for joining us on our three months ended 31st of June 2022 earnings conference call. I'm joined today by our CFO, Michael Gregos. We have issued a press release announcing our results for the third period. Certain non-GAAP measures will be discussed on this call. We have provided a description of those measures as well as a discussion of why we believe this information to be useful in our press release. Moving on to slide three of the presentation. We are pleased to report the results of the three months ended 31st of June 2022. All six LNG carriers in our fleet are operating under their respective long-term charters. The fleet's utilization was 100% for the ninth consecutive quarter, including this quarter, as defined in our press release.
For the Q2 of 2022, we reported net income of $11.1 million, earnings per common unit of $0.22, adjusted net income of $9.1 million, adjusted earnings per common unit of $0.17, and adjusted EBITDA of $22.9 million. In terms of operational highlights, during the second and Q3s of 2022, we successfully completed the special service and dry dockings of the Clean Energy, Amur River, and Ob River, including ballast water installation in all three vessels in accordance with current regulatory requirements. Our thoughts go out to everyone affected and suffering as a result of the crisis in Ukraine. We continue to closely monitor this ongoing situation, including the implications of economic sanctions, trading restrictions, and other considerations that may affect our business. The partnership is currently in compliance with applicable U.S. and EU sanctions.
It is our understanding that the current U.S. and EU sanctions regime has broadly exempted LNG shipping and does not materially affect the business operations or financial conditions of the partnership. The partnership's counterparties are performing their obligations under their respective time charters in compliance with applicable US and EU rules and regulations. Our vessels named Clean Energy, Ob River, and Amur River, currently chartered to formerly Gazprom Marketing and Trading of Singapore, which has been renamed Securing Energy for Europe Marketing and Trading, and which we onward will refer to as SEFE. SEFE has been placed under the control of the German government. The parent of SEFE has received a loan commitment of approximately EUR 9.8 billion from the German government.
Effectively, the Clean Energy, Ob River, and Amur River are trading on routes as directed by SEFE and are no longer sub-chartered by SEFE to Sakhalin Energy. Sanctions legislation is changing rapidly and the partnership is continuously monitoring the ongoing situation. I will now turn the presentation over to Michael, who will provide you with further comments on the financial results. Thank you, Tony. Turning to slide four, our quarter results continue to reflect our stable, contractually based, operating model as our fleet continues to operate with 100% utilization.
Net income for the quarter increased by 22% to $11.1 million, primarily due to a $4.8 million gain under our interest rate swap, which was partially offset by the $2.8 million cost and 20 days scheduled off-hire days associated with a special survey and dry docks of the Clean Energy and the Amur River. The Clean Energy class survey commenced on March 16 and was completed on April 15, and the Amur River's class survey commenced on June 25 and was completed on July 29. The Q2 dry docking and special survey costs of $2.8 million consists of $2.2 million for the Clean Energy and approximately $600,000 for the Amur River. As of today, we have completed the third special survey and dry docks of our three steam turbine vessels.
Q3 earnings will reflect the completion of the scheduled special survey and dry dock of the Amur River and the Ob River, the cost of which for the Q3 is expected to amount to about $8 million in total. $3.6 million for the Amur River and $4.2 million for the Ob River. Without taking into account the lost revenue due to 67 off-hire days as a result of these scheduled class survey costs, the impact of which will be about $4 million for the Q3. Including the installation of the ballast water treatment system, which is capitalized, the total cost of the third special survey and dry docks of our three steam turbine vessels amounted to $17 million, excluding off-hire time.
$2.6 million impacted our Q1 P&L, $2.8 million our Q2 P&L, and as I stated before, $8 million is expected to impact our Q3 P&L. $2.6 million relates to the installation of the ballast water treatment system, which will be capitalized. Turning to slide five. As of end of June, we had $543 million debt outstanding under one credit facility, all of which is being hedged with an interest rate swap, leading to a fixed interest rate of 3.41% for the life of the loan until its maturity in September 2024.
We are continuing our comprehensive deleveraging path, which commenced in the Q1 of 2020, having repaid through the quarterly installments on our credit facility $132 million in debt, resulting in a decrease in our net leverage to 4.6x from 6.6x , and an increase in book value of our equity of 32%. Moving to slide six. In line with our strategy of using our contracted cash flow to reduce leverage for the quarter, we utilized 76% of our unlevered cash flow to service debt and interest payments. Excluding working capital changes, operating cash flow for the quarter was $17.5 million. Our cash balance decreased by about $6.4 million to $100 million, primarily due to working capital changes.
Our per-vessel quarterly break-even rate, including all operating G&A expenses, debt service payments, and class survey costs amounted to $53,300, excluding preferred distributions, versus our fleet contracted time charter rates for the quarter, which amounted to $62,000 per day per vessel. That wraps it up from my side. I'll pass over the presentation to Tony. Thank you, Michael. Let's move on to slide seven. Our fleet currently counts 6 LNG carriers with an average age of about 12.1 years. The charterers of our vessels are Equinor, SEFE of Singapore, and Yamal Trade of Singapore. As of today, the fleet contract backlog is about $950 million, equivalent to an average backlog of about $158 million per vessel. The fleet's average remaining charter period is about 6.4 years.
Moving on to slide eight. Our strategy is to conclude long-term charters with reputable LNG producers. The earliest contracted redelivery date for any of our six LNG carriers is in the Q3 of 2023 for the Arctic Aurora, with the second-earliest contract redelivery in the Q1 of 2026 for the Clean Energy, both subject to terms of the applicable charter. Barring unforeseen events and vessel scheduled dry dockings, our fleet is 100% employed for the remainder of 2022, 96% for 2023, and 83% for 2024 and 2025. There is a very high demand for LNG and LNG time shipping. As such, we believe that the Arctic Aurora should be in a very good position to benefit from a strong period market.
All the vessels in our fleet are employed on time charter contracts under which the charterer pays the major voyage-related variable costs such as fuel, canal fees, and terminal costs. Two of the vessels, namely Lena River and Yenisei River, are under drydock and OPEX costs passed through the contracts and in general provides good protection for reasonable inflation and operating expenses. Let's move on to slide nine. Since September 2019 until Q2 2022, the partnership has repaid $132 million in debt, increased its cash balance from $66 million to $100 million, decreased net leverage from 6.6x to 4.6x, and increased book equity value by 31% to $402 million.
The partnership's deleveraging efforts should continue to build equity value on a contractual structured basis as we continue to benefit from stable long-term cash flow visibility. The Russia and Ukraine situation has shed light on a fragile European energy infrastructure and a general global underinvestment into LNG production and receiving facilities. The EU's goal to replace Russian pipeline gas imports with LNG imports has increased competition for LNG supply and shipping, which has resulted in a significant increase in time charter rates and periods. With the opening of the Arctic Aurora in Q3 2023, we believe the partnership will have exposure to strong shipping fundamentals. Some European companies are looking to accelerate their infrastructure development by chartering FSRUs. Germany, which currently does not have any LNG import facilities, has recently chartered FSRUs for long-term contracts, two of which are from the private fleet of Dynagas Ltd.
Post current charters, we believe the partnership has the potential to consider conversion of existing LNG carriers to FSRUs as an alternative to conventional LNG charters, and both alternatives will be considered. We believe the combination of the availability of the Arctic Aurora against the strong markets and the further strengthening of our balance sheet places the partnership in a favorable position. We have now reached the end of the presentation, and I now open the floor for questions. Thank you.
Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we hold for questions. Thank you. Our first question is from Please proceed with your question.
Great. Thanks, Tony and Michael. I had two questions. First, following up on, Tony, what you just mentioned about the FSRUs. Obviously in Europe in particular, it's been a pretty good market. I think I heard you right when you said that the partnership might consider converting some of the vessels, although everything except the Arctic Aurora has a really long-term contract. First of all, is there a way to maybe alter or change or do something in order to free up one of the other vessels such that it might be available? And then are there any particular, whether it's a few of the older steamships or the TFDEs, any of the vessels particularly suited for conversion versus the others?
Yeah. Thank you, Ben. I mean, you are entirely right that, I mean, what the partnership is, you know, considering is, you know, the conversion of its existing fleets. That would be post charters. Of course, the earliest availability is the Arctic Aurora, and that would be a very complex solution, so difficult to convert with you know in such a short period of time because there are lead times on equipment and so on. For example, the Clean Energy, which is coming open in 2026, that is actually not so far away given that the shipyards are booked out. The Clean Energy is a very good candidate for an FSRU conversion.
In the past, I think we've spoken about before with you know with DNV GL you know some conceptual studies and so on. Given that the vessel has a good intake, it has you know good boilers and so on, it is a suitable candidate for conversion. That is something that we are considering. Of course, we are considering just normal ongoing chartering activity as well.
Okay. Yeah, that's helpful. Then maybe for Michael, I believe you guys had sort of paused on buying back the preferreds in the last year or so. Noticed that both tranches are now trading a little bit below par in the kind of lower twenties. Any thinking about sort of stepping that back up since you're not below par again?
Well, no, I think we had mentioned before that under our credit facility, we would need a waiver to be able to buy back the preferred. We did enter into a waiver to be able to buy back preferred from the proceeds of our ATM, which we have entered into in 2020, but we never really issued any equity under our ATM program. That program really never proceeded. You know, as things stand now, under our credit facility, you know, we would need a waiver to use existing cash to buy back our preferreds.
Okay. That's right. All right. Well, I appreciate it. Thank you.
Thank you. Thank you, Ben.
Thank you. Thank you. There are no further questions at this time. I'd like to pass the floor back over to CEO Tony Lauritzen for any closing comments.
Well, we would like to thank you for your time and for listening in on our earnings call. We look forward to speak with you again on our next call. Thank you very much. Goodbye.
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.