MONACO–(BUSINESS WIRE)–Apr. 21, 2015–
GasLog Ltd. (“GasLog” or the “Company”) (NYSE:GLOG) and GasLog Partners
LP (“GasLog Partners”) (NYSE:GLOP) today announced that GasLog has
agreed to charter to Methane Services, Ltd. (“MSL”), a subsidiary of BG
Group plc (“BG”), three of GasLog’s uncontracted newbuilds that are
currently under construction. MSL also has an option to elect to charter
an additional six newbuilds provided it makes that election within 2015.
The highlights of this transaction are as follows:
-
MSL will charter three newbuildings commencing mid-2018 and early 2019
for average initial terms of approximately 9.5 years at attractive
rates -
These charters will add approximately $845 million of fixed rate
revenue to GasLog’s existing contracted revenue backlog -
MSL has an option exercisable within 2015 to charter an additional six
newbuildings for average initial terms of approximately 10 years -
The six option vessels would add approximately $1.8 billion of fixed
rate contracted revenue(1) should MSL exercise its option
The three firm ships to be chartered by MSL will be modern 174,000 cubic
meter LNG carriers with low-pressure, two-stroke propulsion technology.
Two of the vessels will be delivered from Hyundai Heavy Industries. One
vessel will be delivered from Samsung Heavy Industries.
Together with MSL’s entry into the 9.5 year average charters on the
three GasLog newbuild vessels, and as part of MSL’s overall portfolio
management, the three existing charters on the GasLog Shanghai, GasLog
Santiago and GasLog Sydney (all owned by GasLog Partners)
will be adjusted. MSL will lengthen two of the existing charters by
approximately 4 months and shorten one charter by 8 months. MSL retains
the existing extension options of two consecutive periods of three or
four years on all three vessels.
MSL also has an option to elect to charter an additional six newbuilds
from GasLog, with average initial terms of ten years at rates consistent
with the three firm charters, provided it makes that election within
2015. If MSL makes that election, MSL would take earlier delivery of the
three firm newbuilds described above immediately upon their delivery
from the shipyards in 2017.
If MSL exercises the options, the three charters of the GasLog
Shanghai, GasLog Santiago and GasLog Sydney would be
further adjusted by a potential shortening of a maximum 31 months in
total, with the aim of redelivering these ships to coincide with the
newbuild deliveries in 2017. This would be at a time when management
believes there will be a tightening of the supply-demand balance for LNG
carriers, as currently indicated by new vessel orders and prospective
LNG projects. This option is currently exercisable only within 2015 and
the parties are discussing a possible extension of such option beyond
the end of 2015.
If MSL does not exercise the extension options referenced above on the GasLog
Shanghai, GasLog Santiago and GasLog Sydney and GasLog
Partners does not enter into a third-party charter on such vessels,
GasLog and GasLog Partners intend to enter into a bareboat arrangement
that is designed to guarantee the total cash distribution from each
vessel. However, if they are unable to agree on such bareboat
arrangement, GasLog will enter into a time charter with GasLog Partners
on equivalent terms to the existing MSL time charters for any period of
shortening.
Paul Wogan, CEO of GasLog, commented, “This is another transformational
transaction for GasLog, potentially adding nine long-term charters to
our fleet. The three firm vessels will add $845 million of fixed
contracted revenue(1) at attractive day rates. This
transaction will also provide long-term charters for three of our
unfixed newbuilds that are currently scheduled to deliver in late 2017.
The transaction also further extends the pipeline of vessels we have
available to drop down into GasLog Partners and we believe enhances our
sum-of-the-parts valuation.”
Andy Orekar, CEO of GasLog Partners, commented, “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.”
Poten Capital Services (UK) advised GasLog on this transaction.
About GasLog Ltd.
GasLog is an international owner, operator and manager of LNG carriers.
GasLog’s fully-owned fleet includes 22 LNG carriers (including 13 ships
in operation, nine LNG carriers on order) and GasLog has four LNG
carriers operating under its technical management for third parties.
GasLog Partners LP, a master limited partnership formed by GasLog, owns
a further five LNG carriers. GasLog’s principal executive offices are at
Gildo Pastor Center, 7 Rue du Gabian, MC 98000, Monaco. GasLog’s website
is http://www.gaslogltd.com.
About GasLog Partners LP
GasLog Partners is a growth-oriented master limited partnership focused
on owning, operating and acquiring LNG carriers under long-term
charters. GasLog Partners’ fleet consists of five LNG carriers with an
average carrying capacity of 151,000 cbm, each of which has a multi-year
charter. GasLog Partners’ executive offices are located at Gildo Pastor
Center, 7 Rue du Gabian, MC 98000, Monaco. GasLog Partners’ website is http://www.gaslogmlp.com.
Forward Looking Statements
This press release contains “forward-looking statements” as defined in
the Private Securities Litigation Reform Act of 1995. The reader is
cautioned not to rely on these forward-looking statements. All
statements, other than statements of historical facts, that address
activities, events or developments that the Company expects, projects,
believes or anticipates will or may occur in the future, including,
without limitation, future operating or financial results and future
revenues and expenses, future, pending or recent acquisitions, general
market conditions and shipping industry trends, the financial condition
and liquidity of the Company, cash available for dividend payments,
future capital expenditures and drydocking costs and newbuild vessels
and expected delivery dates, are forward-looking statements. These
statements are based on current expectations of future events. If
underlying assumptions prove inaccurate or unknown risks or
uncertainties materialize, actual results could vary materially from our
expectations and projections. Risks and uncertainties include, but are
not limited to, general LNG and LNG shipping market conditions and
trends, including charter rates, ship values, factors affecting supply
and demand of LNG and LNG shipping, technological advancements and
opportunities for the profitable operation of LNG carriers; our ability
to enter into time charters with our existing customers as well as new
customers; our contracted charter revenue; our customers’ performance of
their obligations under our time charters and other contracts; the
effect of volatile economic conditions and the differing pace of
economic recovery in different regions of the world; future operating or
financial results and future revenues and expenses; our future financial
condition and liquidity; our ability to obtain financing to fund capital
expenditures, acquisitions and other corporate activities, funding by
banks of their financial commitments, and our ability to meet our
obligations under our credit facilities; future, pending or recent
acquisitions of ships or other assets, business strategy, areas of
possible expansion and expected capital spending or operating expenses;
our expectations relating to dividend payments and our ability to make
such payments; our ability to enter into shipbuilding contracts for
newbuildings and our expectations about the availability of existing LNG
carriers to purchase, as well as our ability to consummate any such
acquisitions; our expectations about the time that it may take to
construct and deliver newbuildings and the useful lives of our ships;
number of off-hire days, drydocking requirements and insurance costs;
our anticipated general and administrative expenses; fluctuations in
currencies and interest rates; our ability to maintain long-term
relationships with major energy companies; expiration dates and
extensions of charters; our ability to maximize the use of our ships,
including the re-employment or disposal of ships no longer under time
charter commitments; environmental and regulatory conditions, including
changes in laws and regulations or actions taken by regulatory
authorities; requirements imposed by classification societies; risks
inherent in ship operation, including the discharge of pollutants;
availability of skilled labor, ship crews and management; potential
disruption of shipping routes due to accidents, political events, piracy
or acts by terrorists; and potential liability from future litigation. A
further list and description of these risks, uncertainties and other
factors can be found with respect to GasLog in its Annual Report filed
with the SEC on March 26, 2015 and with respect to GasLog Partners in
its Annual Report filed with the SEC on February 17, 2015. Copies of
each Annual Report, as well as subsequent filings, are available online
at http://www.sec.gov.
We do not undertake to update any forward-looking statements as a result
of new information or future events or developments except as may be
required by law.
——————–
(1) Contracted revenue calculations assume:
(a) 365 revenue days per annum, with 30 off-hire days when the ship
undergoes scheduled drydocking;
(b) all LNG carriers on order are delivered on schedule;
(c) no exercise of any option to extend the terms of charters.
Source: GasLog Ltd.
GasLog Ltd.
Paul Wogan, Phone: +44 203 388 3106
(CEO)
GasLog
or
Andy Orekar, Phone: +1 212 223 0847
(CEO)
GasLog Partners
or
Simon Crowe, Phone: +44 203 388 3108
(CFO)
GasLog and GasLog Partners
or
Jamie Buckland, Phone: +44 203
388 3116
(Investor Relations) GasLog and GasLog Partners
