Celsius Shipping executive chairman Jeppe Jensen discusses his career in shipping, including the formation of GasLog and savvy investments in the LNG sector
With a fleet of 13 LNG carriers — four in operation and nine under construction — Celsius Shipping has rapidly risen in the LNG shipping sector, led by the deft hand of veteran shipping executive Jeppe Jensen.
Mr Jensen, founder and executive chairman of Celsius Shipping Group, sat down with Poten & Partners chairman emeritus Michael Tusiani at Marine Money Week 2022 in New York City in June to discuss his more than four-decade journey, starting as shipping trainee at AP Møller Maersk in 1985 and founding a shipping group with a diversified fleet valued at over US$3.3Bn in 2012.
Celsius owns about 50 chemical tankers, product tankers, container vessels and LNG carriers. One of the fastest growing LNG carrier owners with one of the youngest fleets, Celsius Shipping has been able to secure long-term charters with Clearlake Shipping, a subsidiary of Gunvor, Cheniere Energy, BP and Shell.
During a one-on-one ‘Captain of Industry’ interview, Mr Tusiani asked why Mr Jensen chose a shipping career and how he founded LNG shipowner GasLog with Peter Livanos. Mr Jensen said it was “pure luck” that he wound up in shipping and he was thankful for the opportunity to join AP Møller-Maersk as a shipping trainee in 1985.
After remaining with AP Møller-Maersk for 22 years, with increasing responsibility in management positions, including senior vice president, Mr Jensen started to feel “the time was right to move on, as I was getting older”. While he said his time at Maersk was “fantastic”, he wanted to realise his boyhood ambitions. “I always had a dream of getting my own business; building something on my own,” he said.
“I always had a dream of getting my own business; building something on my own”
In 2007, he started working at home after business hours on a plan to launch his own shipping company. “I ended up with a commitment letter from Lehman Brothers for US$300M to start a Danish shipping company,” he said.
Mr Livanos caught wind of the commitment letter and contacted Mr Jensen, telling him of his own aspirations to build a shipping business. Mr Jensen said Mr Livanos told him his new company – GasLog – had secured a technical management agreement for one LNG carrier and offered to join with him to work together to build the company, rather than compete. “And that was how we ended up shaking hands. We built GasLog from there,” said Mr Jensen.
Serving as chief executive, Mr Jensen worked with Mr Livanos for five years to successfully build GasLog Ltd into one of the premier LNG shipowners and operators.
“But after building GasLog, you prepared it for an IPO, and just after five years, you decided to leave. Why?” Mr Tusiani asked Mr Jensen.
Mr Jensen responded: “The common vision we had was really to build scale, and we didn’t talk too much about where we were going to end up with the company.” Mr Jensen said the business model for GasLog was to order ships and get contracts in place. “We ordered two ships, then we fixed them, then we ordered two more on speculation, then we fixed them; it was a sort of growth model.”
After 10 or 12 newbuildings were on order, Mr Livanos, who was the principal shareholder, had a desire to get in the public market and attract some public capital. “I wasn’t necessarily in agreement with that,” said Mr Jensen. “I had other preferences. And that was why we decided to prepare the IPO, and get it done. And then we parted after that.”
Vessel | Capacity (m3) | Propulsion | Yard | Yr built |
Celsius Copenhagen | 180,000 | X-DF | SHI | 2020 |
Celsius Canberra | 180,000 | X-DF | SHI | 2021 |
Celsius Charlotte | 180,000 | X-DF | SHI | 2021 |
Celsius Carolina | 180,000 | X-DF | SHI | 2021 |
SN 2459 | 180,000 | ME-GA | SHI | 2023 |
SN 2460 | 180,000 | ME-GA | SHI | 2023 |
SN 2461 | 180,000 | ME-GA | SHI | 2024 |
SN 2579 | 180,000 | ME-GA | SHI | 2024 |
SN 2584 | 180,000 | ME-GA | SHI | 2024 |
SN 2585 | 180,000 | ME-GA | SHI | 2024 |
SN 2598 | 180,000 | ME-GA | SHI | 2025 |
SN 2599 | 180,000 | ME-GA | SHI | 2025 |
SN 2619 | 180,000 | ME-GA | SHI | 2025 |
Source: Celsius Shipping; LNG Shipping & Terminals |
Forming Celsius
After leaving GasLog in 2012 and “playing golf for three weeks and then getting bored”, Mr Jensen set out with the ambition of keeping his hand in the industry by buying two or three ships. However, once others joined the effort, with their own ideas and aspirations, “we ended up where we are today,” he said. Working with private equity, Mr Jensen formed Celsius Shipping in 2012.
Ultra-eco ship technology
Adding ships in other segments initially, Celsius Shipping placed its first order for two LNG carrier newbuildings with Samsung Heavy Industries (SHI) in 2018. These 180,000 m3 vessels were built with GTT Mark III Flex membrane tank containment systems and were priced at US$187M each. The contract contained options for two more newbuilds, which Celsius exercised. Each LNG carrier was equipped with a reliquefaction plant to help optimise cargo outturns, and SHI’s Saver Air, which reduces friction between the hull and seawater using an air-lubrication system to create a skirt of microbubbles on the bottom of the ship’s hull to improve fuel consumption.
With its design proven based on the operational experience from Celsius Copenhagen, Celsius Canberra, Celsius Charlotte and Celsius Carolina, built between 2020 and 2021, Celsius Shipping placed an order last year for four LNG carriers for long-term charter to Clearlake Shipping, a subsidiary of Gunvor, a relationship dating back to Celsius Shipping’s first LNG vessel, Celsius Copenhagen.
“Our design has a little extra feature where the filling level has been improved to 99.4%”
Celsius has chartered Celsius Canberra, Celsius Charlotte and Celsius Carolina to Cheniere Energy, two newbuilds to BP, two to Shell and one to an undisclosed owner, according to data from VesselsValue.
Celsius Shipping’s nine LNG newbuilds are among the first to feature MAN Energy Solutions’ new low-pressure ME-GA dual-fuel engines, rather than WinGD X-DF Otto-cycle, dual-fuel, two-stroke engines, which were specified in its first four LNG carriers.
Mr Tusiani asked Mr Jensen why Celsius Shipping preferred LNG carriers with capacities of 180,000 m3 as opposed to the “industry standard” 174,000-m3 vessel. “Economy of scale is really important in LNG, and frankly, I don’t understand why people continue to order 174’s because the difference of 6,000 m3 is very important; that carries a lot of value,” said Mr Jensen. “If you do six or seven round trips a year, you can easily calculate how much extra value that is for the charterer,” he said. “Our design has a little extra feature where the filling level has been improved to 99.4%, rather than standard versus 98.5%. So, we can deliver 7,000 m3 more gas for each voyage.”
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