NYSE-listed LNG shipping firm GasLog Partners has extended a charter deal for one of its vessels with LNG giant Shell, as it works to complete the previously announced merger deal with GasLog.
GasLog Partners, which recently entered into the merger deal with Peter Livanos-led GasLog, revealed this charter deal in its first-quarter earnings report.
Under the deal, a unit of Shell exercised its option to extend the contract for the 174,000-cbm GasLog Geneva for another five years.
With this move, Shell will use this 2016-buit TFDE carrier to ship LNG until September 2028.
The firm has another option to extend the deal for three more years.
Prior to this, Shell also exercised its five-year option for the 170,000-cbm Methane Becki Anne.
GasLog Partners confirmed it completed the sale and lease-back of the 2013-built 155,000-cbm, GasLog Sydney, with China Development Bank Financial Leasing (CDB Leasing).
The firm said that the deal worth $140 million with a unit of CDB Leasing has no repurchase option or obligation.
Also, the completion of the transaction resulted in the recognition of an impairment loss of $0.1 million and a loss on disposal of $1 million in the three months ended March 31, 2023, GasLog Partners said.
GasLog Partners said its revenues reached $99.1 million for the first quarter, compared to $85.5 million for the same period in 2022.
It attributed the increase of $13.6 million mainly to a net increase in revenues from its vessels operating in the spot and short-term markets in the first quarter of 2023, under time charters that were executed in 2022.
This net increase was partially offset by a decrease in revenues due to the off-charter days of the scheduled dry-docking of GasLog Shanghai and also the sale of Methane Shirley Elisabeth in the third quarter of 2022, it said.
Profit reached $36.4 million, compared to $35 million for the same period in 2022.
GasLog Partners attributed the increase in profit of $1.4 million mainly to the increase in revenues and the decrease in vessel operating costs of $2.7 million.
GasLog Partners capitalized on the “strong” LNG market
CEO Paolo Enoizi said the merger deal with GasLog is a “transformative transaction for the partnership that will enable its unitholders to take advantage of a significant premium to the unit trading price.”
Subject to the affirmative vote of the majority of the common unitholders, the company expects the transaction to close in the third quarter of this year.
“Overall, the term fixtures executed so far have enabled the execution of our capital allocation strategy, helping us make meaningful progress towards our leverage targets and strengthening our balance sheet with the repurchase of $49.2 million in preference units in the past year, or approximately $68 million since inception of the repurchase plan in August 2021, which is also improving the partnership’s all-in break-even levels in our fleet,” he said.
Enoizi added that the firm has capitalized on the “strong LNG market through profitable fixtures, exercised charterers’ options, and sale and lease-backs.”