BG Group Sells, Charters LNG Ships

BG Group and GasLog Ltd. have entered an agreement for GasLog to acquire two modern tri-fuel diesel electric (TFDE) LNG carriers for $460 million. BG Group will charter back the two vessels, the Methane Becki Anne and Methane Julia Louise, for nine and 11 years with further options to extend the term for each vessel by either three or five years. According to BG Group, the transactions provide it with flexibility in managing its future fleet requirements and, as the ships are currently managed by GasLog, leave day to day operations broadly unchanged.

 

The LNG carriers are currently associated with a Pension Funding Partnership which is one element of BG Group’s funding arrangements for the BG Pension Scheme. Consequently the majority of the proceeds from this sale will be utilized to support the funding of that scheme. 

 

BG Group said the remaining net proceeds from the transaction of around $100 million will be used to reduce its net debt.

 

Closing of the transaction is subject to the satisfaction of certain conditions, including the completion of definitive documentation. The transaction is expected to close in the first quarter of 2015, with the charter agreement expected to commence at the same time.