• Apr. 9, 2015, 2:59 PM
    • Royal Dutch Shell's (RDS.A, RDS.B) planned acquisition of BG Group (OTCPK:BRGXF, OTCQX:BRGYY) would create a giant operator of liquefied natural gas ships, offering owners that charter the ships more opportunities for lucrative, long-term contracts in an otherwise depressed shipping industry.
    • Energy producers such as Shell and BG lease rather than own most of the ships moving their products, and the leases go to a handful of trusted owners, generating ~$75K/day for a ship that carries 160K cm of LNG; the break-even point for such a ship is $50K at most.
    • A main beneficiary is GasLog (GLOG, GLOP), which has chartered its vessels to Shell, BG and other energy producers for nearly 15 years; GLOG, whose shares gained 4% yesterday on news of the merger, charters 15 LNG carriers to BG and two to Shell from a total fleet of 27 carriers.
    • The deal is "a strong signal from Shell that they see their future in LNG... [it] shows their desire to grow the business and puts us in a good place to grow with them," says GLOG CEO Paul Wogan.
    • Teekay LNG Partners (NYSE:TGP) is another LNG vessel operator expected to benefit from LNG demand.
    Apr. 9, 2015, 2:59 PM | 7 Comments