GasLog, the Monaco-based specialist in LNG carriers, has doubled up on its shipping relationship with Cheniere Energy by ordering two more newbuilds that will go straight into firm, seven-year charter party agreements with the Texas producer as soon as they are launched.
The latest orders with Samsung Heavy Industries bring to four the number of newbuilds GasLog has commissioned under pre-arranged charter party deals with Cheniere. “The four newbuilds we have on order for Cheniere will provide further support for their leading position in US LNG exports,” said chief executive Paul Wogan in a statement.
Just two weeks before GasLog placed the orders with Samsung Heavy Industries, Cheniere subsidiary Sabine Pass Liquefaction signed a heavyweight 20-year sale and purchase deal with Malaysia’s Petronas that will see Cheniere deliver 1.1 mta of LNG at a purchase price indexed to the monthly Henry Hub rate, plus an unspecified fee.
The latest announcement means that GasLog ordered seven newbuilds in 2018, six of which are heading for long-term charters. To date, the group’s consolidated fleet includes 14 LNG carriers operated by its subsidiary, GasLog Partners. A 15th LNG carrier was sold to a subsidiary of Mitsui Company and leased back under a long-term bareboat charter.
GasLog cites a number of factors that support its growing ambitions as the group meets its bankers’ earning and debt repayment targets. “Attractive LNG shipping market fundamentals, the strong liquidity position of the GasLog group, and increasing debt capacity due to scheduled amortisation underpin the funding strategy for our newbuild programme,” the company said. “As a result of our activities in 2018, we have made substantial progress towards meeting our target of more than doubling consolidated EBITDA over the 2017-2022 period.”
Healthy charter rates also lie behind GasLog’s rapid growth. All of its newbuilds as well as the currently chartered GasLog Sydney will benefit from multi-year deals written “broadly in line with mid-cycle rates that deliver returns [that meet] GasLog’s financial strategy,” the company said.
The latest orders specify 180,000 m3 vessels with low-pressure two-stroke propulsion. The cargo containment systems will be provided by GTT’s Mark III Flex Plus technology.