New York-listed GasLog and spin-off GasLog Partners are withdrawing their LNG carriers from their pooling joint venture with Golar LNG.
The Cool Pool focuses exclusively on spot fixtures of up to 12 months in duration, but will now be left with just Golar's tonnage.
GasLog said: "Golar’s declared intention to spin off its spot LNG vessels, coupled with the group’s belief that robust LNG commodity supply and demand fundamentals will lead to a tightening LNG shipping market and increased multi-year charter opportunities, has led it to decide to withdraw its vessels from The Cool Pool.
"Assuming commercial control of these vessels will allow the group greater flexibility and agility in pursuing longer-term time charter opportunities."
It added the move will enhance its ability to deliver its strategic objective of optimising fleet employment across spot and term markets and maximising vessel utilization, earnings and value.
GasLog has five ships in the pool and GasLog Partners one. Golar will be left with its 10 in the pool.
The GasLog units will withdraw over the coming months, based on current commitments and charter opportunities.
Right time
GasLog CEO Paul Wogan said: “I would like to thank our Cool Pool partners for their collaboration over the past four years.
"However, with Golar’s declared intention to spin off its LNG vessels and a tightening of the LNG carrier market now underway, we believe it is the right time to assume control of our vessel marketing as we seek to place more vessels on longer-term charters to optimise the earnings of our fleet through the cycle.
"This move is underpinned by increasing levels of customer enquiry in multi-month and multi-year charters.”
GasLog Partners CEO Andrew Orekar added: “The partnership remains focused on delivering cash flow visibility for our unitholders, and today’s decision to withdraw the GasLog Shanghai from The Cool Pool will enhance our ability to secure an attractive term charter for this vessel.”
Golar has been eyeing a listing of its LNG carriers for some time and is in talks with Awilco LNG and Christos Economou’s TMS Cardiff Gas to join the venture.
Golar said on Thursday that it or its spot spin-off will assume ownership of the pool.
"There will be a ramp-down period to allow for conclusion of existing GasLog vessel charter contracts," it added.
Golar remains in talks over its spot spin-off and expects to keep trading its TFDE carriers in the pool, together with any further tonnage within the new shipping entity.
"Transfer of the Cool Pool to this new shipping entity is expected to create the leading independent provider of available on-the-water TFDE LNG carriers," it said.
"Formal launch of the spin-off and the transfer of the shares in Cool Pool thereto remains subject to satisfactory market and other closing conditions."
Dynagas out
Last July, Greek shipowner Dynagas gave notice to The Cool Pool that it intended to remove its trio of LNG carriers from the pooling operation.
Dynagas chief executive Tony Lauritzen confirmed to TradeWinds that its 162,000-cbm Clean Planet (built 2014), Clean Horizon (built 2015) and Clean Vision (built 2016) would leave the pool that year.
Golar nears spin-off
In May this year, TradeWinds reported that Tor Olav Troim’s Golar LNG had moved closer to spinning-off its LNG carrier fleet at a time the company is switching focus from raising funds to making better use of existing assets.
As it reported first quarter results, Golar said its board had voted in favour of the listing, subject to market conditions.
It explained the move would allow the existing Nasdaq-quoted vehicle to focus on its FLNG and downstream assets.
“This will allow LNG shipping investors more direct exposure to the LNG shipping market and reposition Golar's core business toward LNG infrastructure on long-term contracts,” the report said.
Thumbs up from Deutsche Bank
Chris Snyder at Deutsche Bank said: "This is a move we support and have been advocating for following disappointing LNG spot shipping performance over the last 12 months due to perpetual utilisation headwinds.
"Spot LNG shipping depends on a tight and relatively steady spot market to capture full headline rates, a backdrop that is difficult to come by in the inherently volatile world of shipping."
"Nonetheless, some positives have come out of the company’s spot exposure including the ability to hunt for term opportunities at the right point in the cycle while also allowing GasLog to market its fleet to new counterparties," he added.
The bank is confident GasLog bosses will be able to source additional term opportunities.
It is maintaining its buy rating and $23 target price.
