Idan Ofer’s Eastern Pacific Shipping is moving into the large gas carrier segment after buying three LPG vessels from Neu Gas Shipping of Germany.
The deal sees the Singapore-based company take over the 60,243-cbm George N, Ernest N and Jenny N (all built 2009). The first vessel handover is said to be imminent.
Gas sector sources said the ships were discreetely marketed to what has been described as a select group of potential buyers.
Eastern Pacific began ramping up its gas carrier fleet two years ago after making what its management at the time said was a firm commitment to the sector.
London gas desk
Three months ago, it expanded its commercial gas team by opening a gas chartering desk in its London office to augment its main gas desk in Singapore.
Sources close to the company said the large gas carriers are a good commercial fit as Eastern Pacific expands its presence in gas.
From a technical perspective, they also fit in well with Eastern Pacific’s existing gas carriers as all were built by Hyundai Heavy Industries, which means many of the onboard systems and technology are similar.
Eastern Pacific's gas carrier fleet comprises six medium-size LPG carriers of between 34,500 cbm and 37,300 cbm. Another two 37,300-cbm vessels, the Winnipeg and Yukon, are under construction at Hyundai Mipo Dockyard in South Korea and are due for delivery in late 2019 and early 2020. Both will be delivered with scrubbers installed.
The large gas carrier sector is described as a small niche segment between the more prevalent medium and VLGC sectors.
“They are like the LR1 equivalents of the product tanker trade,” said one gas market source, who estimates there are only 21 large gas carriers operating worldwide, with no further units on order.
The dominant player in this sector is Norway’s Solvang, which operates nine ships.
'Nice rebound'
Secondhand sales are extremely rare, and brokers who work the gas market said it would be hard to estimate what Eastern Pacific would have paid, compared with recent deals.
“There haven’t been secondhand sales for ships of this size in many years. The only recent transactions have been demolition deals involving some early 1990s-built ships from BW LPG and Varun Shipping,” a Singapore-based gas broker said.
VesselsValue suggests that ships similar to the George N, Ernest N and Jenny N are each worth about $46m. However, this does not factor in whether any long-term employment comes attached and how keen Neu Gas was to sell.
Gas brokers said the Ernest N has just begun a one-year charter to US interests at an undisclosed rate. TradeWinds was unable to ascertain how the other two ships are employed.
The large gas carrier sector is described as “enjoying a nice rebound” with average time-charter rates of about $900,000 per month now achievable.
Vessels in the medium-size segment that Eastern Pacific operates in are said to be earning about $700,000 per month.
Whether Eastern Pacific has any employment of its own lined up for the Neu ships remains unclear. Chief executive Cyril Ducau could not be reached for comment.
Neu Gas, which is part of family-owned Neu Seeschiffahrt, is left with three VLGCs in its fleet. Managing director Thorstein Bergesen declined to comment on the sale.
