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    GasLog Updates on Newbuilds, Charters


It says the rates are in line with its financial strategy.

by: William Powell

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GasLog Updates on Newbuilds, Charters

Monaco-based LNG shipping firm GasLog has provided further details on its seven-year charter party agreements with Cheniere Energy, announced late last year.

GasLog has ordered two 180,000 m3 LNG carriers (HN 2311 and HN 2312) with low pressure two stroke (“LP-2S”) propulsion and GTT Mark III Flex Plus cargo containment systems from Samsung Heavy Industries in South Korea, with expected delivery in mid-2021. The charters build on GasLog’s existing relationship with Cheniere, which now totals four newbuilds on order; and the GasLog Partners LP owned GasLog Sydney, which is on a multi-year time charter.

The rate of hire for the charters is broadly in line with mid-cycle rates and delivers returns in line with GasLog’s financial strategy, it said January 9.

GasLog Partners has the right to acquire the vessels delivered into the Charters pursuant to the omnibus agreement between GasLog and GasLog Partners. As a result, GasLog Partners’ potential dropdown pipeline will increase to 12 LNG carriers with charter length of five years or longer and the partnership is well positioned to announce a further dropdown acquisition within the first quarter of 2019.

GasLog CEO Paul Wogan said he was "delighted to build further on our existing relationship with Cheniere. The four newbuilds that we now have on order for them will provide further support for their leading position in US LNG exports. We announced seven newbuild orders in 2018, all equipped with the latest advancements in propulsion and boil-off technology. Six of these newbuilds have long-term charters attached, cementing our status as a leading owner and operator of LNG carriers. Attractive LNG shipping market fundamentals, the strong liquidity position of the GasLog group and increasing debt capacity due to scheduled amortization underpin the funding strategy for our newbuild program. As a result of our activities in 2018, we have made substantial progress towards meeting our target of morethan doubling consolidated earnings before interest, tax, interest, depreciation and amortisation over the 2017-2022 period.”

 Cheniere has sold out most of its LNG capacity at its US terminals, on free on board basis. But it has retained a small percentage for its own use, for which it will need transport to market.