BG blockbuster for GasLog

New York-listed GasLog says the energy firm has fixed three newbuildings on long-term charters and has the option to take six more.

Contracts for the firm vessels involve one ship at Samsung Heavy Industries and two at Hyundai Heavy Industries, a statement says.

Deals worth $845m will begin in 2018 and early 2019 and run for 9.5 years at what GasLog calls attractive rates.

Options on the six newbuildings, which would add $1.8bn to the GasLog backlog via 10-year charters, must be exercised this year, the owner explains.

Should the options be taken the firm ships will join BG direct from the yards in 2017, a statement explained.

“Solid deal”

Paul Wogan, the chief executive of GasLog, says the development marks another transformational transaction for the company.

Jan Andreas Naess of Fearnley Securities said: “We see this as a solid deal for the company, adding significantly to its contractual backlog at firm rates.”

Jonathan Chappell of Evercore explained: “The key takeaway is that this deal ensures (profitable) long-term employment for three of GasLog’s seven ships that were previously potentially exposed to market conditions.”

As part of the agreement, GasLog has seen charters for three existing vessels owned by its MLP GasLog Partners adjusted.

Charters for the 155,000-cbm trio GasLog Shanghai, GasLog Santiago and GasLog Sydney (all built 2013) will be affected with two lengthened by four months and one shortened by eight months. Optional agreements on those charters are unaffacted.

However, should BG take in the six newbuilding options, charters of the GasLog Shanghai, GasLog Santiago and GasLog Sydney will be further reduced to coincide with the newbuilding deliveries in 2017.

Dropdown pipeline grows

Andy Orekar, Chief executive of GasLog Partners, said “Today’s transaction adds up to nine vessels under long-term contracts to GasLog Partners’ dropdown pipeline, giving us additional visible growth for multiple years.

“The immediate addition of three firm charters brings our total current pipeline to 15 LNG carriers, which would increase further to 21 vessels if MSL exercises its option for the six additional newbuildings.

“With this enhanced pipeline of vessels and the agreement by GasLog to compensate for any shortening of existing charters, GasLog Partners continues to be well positioned for future growth.”

GasLog has nine newbuildings in its fleet of 22 owned ships. It also has options on six more newbuildings.

The MLP, which Chappell says is also a big winner in today’s deal, has a five trading vessels.

Naess concluded: “With a solid contract portfolio GasLog is well covered in the medium term.

“Several vessels are coming off charters and more newbuildings are expected to be added toward the end of the decade. The company should thus be well positioned to benefit from improving markets.”

source:www.tradewindsnews.com