Singapore gas carrier owner BW LPG has hit the acquisition trail to expand its three-year-old LPG trading operation.
The Anders Onarheim-led shipowner has agreed to acquire the LPG trading operations of Spanish company Vilma Oil, it was announced on Monday.
Few other details about the transaction were disclosed. The financial terms of the deal were not revealed.
Founded in 1996, Vilma Oil has offices in Madrid and Singapore and trades more than 4m tonnes of petroleum products per year, including LPG, naphtha, gasoil and fuel oil, according to its website.
“While the acquisition price/transaction terms are yet to be confirmed, the addition of LPG trading and moving towards a fully integrated model screens a positive at first glance,” Fearnley Securities analysts Oystein Vaagen and Erik Gabriel Hovi said in a note Monday.
TradeWinds has previously reported that it has a VLGC on long-term charter from South Korea’s KSS Line and a stake in a modern VLGC owned by Solvang ASA.
However, TradeWinds was unable to ascertain whether these two ships are involved in the transaction.
BW LPG established its product services division in February 2019 to offer customers what it described as a “low-risk and fully integrated product delivery service” as well as support its core shipping business.
“This acquisition will allow BW LPG to scale its product services offering to provide even better service to customers while boosting fleet utilisation,” BW LPG said.
It added that the expanded division would “continue to operate within disciplined capital requirements and defined risk thresholds”.
“The acquisition brings a highly experienced team with a strong track record to BW LPG and is in line with our strategy to support our core shipping business,” said chief executive Anders Onarheim.
The acquisition is subject to approval from the Spanish regulatory authorities, and the transaction is expected to close by the end of this year.
Last month BW LPG recruited shipping industry veteran Kristian Sorensen as deputy chief executive of the Oslo-listed shipowner.
The former Fearnleys and Avance Gas chief executive has also been named head of strategy and has been described as the “leading candidate for succession” by the shipowner.
BW LPG is the world’s leading owner and operator of LPG vessels with a fleet of 38 VLGCs either owned or chartered with a total carrying capacity of more than 3m cbm.
In May, the company reported a first-quarter net profit of $58m, down from $71m a year ago, mainly due to lower spot rates and lower fleet utilisation arising from retrofitting three VLGCs with LPG dual-fuel propulsion technology.
BW LPG is said to have a war chest of around $650m available, according to a recent report on the sector by Fearnleys Securities.
