Bumper year for LNG sale and purchase deals with nearly 25 vessels sold

Twenty-four LNG carriers have exchanged hands during 2022 in deals totalling more than $4bn, making it the busiest year on record for the sale of newbuildings and secondhand vessels.

The bonanza has been boosted by the offloading of at least seven LNG carriers and newbuildings that were previously under the control of Russian shipowner Sovcomflot (SCF Group). Possibly more are in the pipeline or have been concluded.

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Affiliates of Idan Ofer-controlled Eastern Pacific Shipping proved a major buyer, snapping up four Sovcomflot vessels and two newbuilding resales originally contracted under the account of a West African trader.

Greek buyers Thenamaris, Alpha Gas and Capital Gas were also out in force, taking seven vessels in total, comprising under-construction vessels and existing LNG carriers.

At least two floating storage and regasification units were committed for sale, with other LNG carriers sold on to serve as the centrepiece for regas projects.

The year also saw the first sale of a floating LNG production unit, with Exmar’s small-scale, 0.5 million tonnes per annum Tango FLNG (built 2017) sold to Italy’s Eni for deployment to the Republic of Congo.

Fourteen 14 LNG carriers were sold in 2021, bolstered by Qatargas’ 10-ship purchase from the Japanese owners it had been working with on long-term time-chartered tonnage. Three vessels were sold in 2020, none in 2019 and two in 2018.

Brokers expect this newfound liquidity in the LNG carrier sale-and-purchase market will continue into 2023, although they question how this sector might develop due to the huge uncertainties in the market.

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They said there is interest from Asian buyers for older LNG carriers, and from Middle East parties and others seeking conversion candidates for project business.

In August, TradeWinds reported that producer Nigeria LNG was in the market looking to offload three of seven steam turbine vessels in its existing LNG carrier fleet.

They named Bonny Gas Transport’s Moss-type 137,231-cbm LNG Rivers and 137,098-cbm LNG Sokoto (both built 2002) and 137,065-cbm LNG Bayelsa (built 2003) as the ships on offer.

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But Nigeria LNG is understood to have been seeking a trio of modern ships to take in as replacement tonnage. Brokers said virtually no ships are available and the sales process on the steamships has not yet progressed.

Malaysian shipowner MISC is also gradually weeding out older tonnage. TradeWinds reported in August that the shipping subsidiary of state energy giant Petronas had put the 137,489-cbm membrane-type Puteri Intan Satu (built 2002) up for sale. Offers were due in that month, but no sale has been concluded.

Back on Russian tonnage, attention remains focused on Sovcomflot’s 174,100-cbm La Perouse (built 2020), which is said to be in the process of a sale, although a deal has yet to be finalised.

Brokers said 2023’s S&P action will most likely centre on what happens in Russia and its war in Ukraine and the incoming Energy Efficiency Existing Ship Index and in particular the annual Carbon Intensity Indicator grades.

One broker described S&P for LNG as traditionally being “always very lumpy” and said it could continue to be hectic or completely die next year.

But Howe Robinson Partners’ senior broker on LNG, Debbie Turner, said this marks a new phase for the LNG market.

Speaking at the World LNG Summit & Awards in Athens this month, she said the sector has never really had an S&P business, but now more steam and dual-fuel diesel-electric vessels are appearing for sale — not always openly but often “under the radar”.