NYSE-listed GasLog will charter up to nine LNG carrier newbuildings to the BG Group, which is in the process of being acquired by Royal Dutch Shell.
GasLog announced on 21 April that BG will charter three previously ordered newbuildings for an average of 9.5 years, commencing in mid-2018 and early 2019. Two of the 174,000 m3 LNG carriers will be built at Hyundai Heavy Industries and one at Samsung Heavy Industries.
BG has the option, exercisable this year, to charter an additional six previously ordered GasLog newbuildings for an average of 10 years each.
Even before the latest charter agreements, GasLog had the largest exposure of any LNG carrier owner to the Shell-BG combination. On 8 April Shell and BG announced a transaction whereby Shell would acquire BG for USD70 billion. Assuming regulatory and shareholder approval, BG would be integrated into Shell in early 2016.
According to IHS Energy data and company filings, Shell and BG currently own 10 LNG carriers and charter in 58 vessels, including those on the water and contracted newbuildings.
GasLog will have 23-29 vessels chartered to Shell/BG: 14 vessels on the water chartered to BG, 7-13 newbuildings chartered to BG (depending on the number of options exercised), and 2 vessels on the water chartered to Shell.
The latest agreement between GasLog and BG follows a string of deals between the two parties last year. Between April and December 2014, BG sold eight LNG carriers to GasLog for USD1.39 billion, with BG then leasing those vessels back through long-term charters.