GasLog Strikes Deal for Two New LNG Carriers

GasLog Singapore, a 155,000 cbm LNG carrier. Image: GasLog
GasLog Singapore, a 155,000 cbm LNG carrier. Image: GasLog

GasLog (NYSE: GLOG) has announced that it has ordered two new 174,000 cbm tri-fuel diesel electric LNG carriers from Samsung Heavy Industries in South Korea.

The vessels are expected to be delivered in Q3 and Q4 2016, respectively, and will commence seven-year charters with a subsidiary of BG Group upon delivery.

GasLog says that the vessels will have a lower delivered cost than the 2 vessels ordered in February 2013 due to benefits from prior builds.

The ships are expected to generate a combined annualized EBITDA of approximately US$46–$47million over the first twelve months of operation, GasLog says. The company adds that it has also secured up to 6 additional options from Samsung, 4 of which are priced, with delivery dates through 2017.

GasLog now has a fourteen-ship fully owned fleet, including two ships delivered in 2010, four ships delivered in 2013 and eight LNG carriers on order. Two of the vessels to be delivered will go on charter with Shell and four to BG. In addition, GasLog says conditions are favorable to look at a range of charter periods, including shorter-term charters, for its two open vessels, which are scheduled for delivery at the end of 2014 and beginning of 2015.

Paul Wogan, CEO of GasLog, commented “It is very pleasing to be able to conclude these significant contracts with our largest customer. These contracts reinforce our strategy of building high quality ships at competitive prices for charter to strong, creditworthy customers. It also supports our view that GasLog, as one of the world’s leading LNG shipowners, is well placed to continue to benefit from the long-term secular growth of the LNG market. We are very pleased to be building the new vessels at Samsung with their solid track record for delivering vessels on time and on budget for GasLog. As well as being tri-fuel and fitted with four stage compressors the vessels will have a Boil Off Rate of 0.09% and have a number of fuel saving devices that make them extremely efficient. In addition the options we have secured show a strong commitment between GasLog and Samsung to continue to support each other’s growth ambitions.”