Dynagas LNG Partners LP announced it has entered into an agreement to purchase from Dynagas Holding Ltd., the Partnership's sponsor, 100% of the ownership interests in the entity that owns and operates the Arctic Aurora, a 2013 built ice class liquefied natural gas carrier, for an aggregate purchase price of $235 million. The Arctic Aurora acquisition is subject to the Partnership obtaining the funds necessary to pay the purchase price and the satisfaction of certain closing conditions. The Partnership expects to finance the acquisition with the net proceeds of a public offering of its common units and a portion of the borrowings under a new $340 million senior secured revolving credit facility.
The Arctic Aurora is currently operating under a time charter with Statoil ASA with an initial term of five years that expires in July 2018. Statoil has the right to extend the charter for consecutive additional one-year periods following the initial charter period. The Partnership's average remaining charter term, based on an expected delivery date for the Arctic Aurora of May 30, 2014 and taking into account the recently announced 13-year time-charter contract with Gazprom Marketing & Trading Singapore Pte. Ltd. for the Clean Force, will be 6.1 years.
The Partnership believes that the Arctic Aurora acquisition is an accretive transaction consistent with its growth strategy. The Arctic Aurora acquisition will generate, assuming full utilization, total contracted gross revenue of approximately $117.2 million, annual gross revenues of approximately $28.3 million and annual net cash from operations of approximately $21.7 million, during the initial charter period with Statoil. The Board of Directors of the Partnership and the Conflicts Committee of the Board have approved the Arctic Aurora acquisition.
Following the completion of this acquisition, the Partnership's management intends to recommend to the Board an increase in the Partnership's quarterly cash distribution per unit of between $0.0225 and $0.0275 (or annualized increase of between $0.09 and $0.11 per unit), which would become effective for the distribution with respect to the quarter ending June 30, 2014 on a pro-rata basis after giving effect to the Arctic Aurora acquisition. Any such increase would be conditioned upon, among other things, the closing of the Arctic Aurora acquisition, the approval of such increase by the Board and the absence of any material adverse developments or potentially attractive opportunities that would make such an increase inadvisable.