Capital Product Partners pouring $756 million into LCO2 and LPG/ammonia carriers

International owner of ocean-going vessels Capital Product Partners L.P. (CPLP) is expanding further into the gas sector with a new strategic investment in ten liquid CO2 (LCO2) and LPG/ammonia carriers.

Illustration only. Courtesy of Capital Gas

The strategic investment will see CPLP acquire six dual-fuel medium gas carriers (MGCs) and four LCO2 handy multi-gas carriers for $756 million, with expected deliveries from the first quarter of 2026 to the third quarter of 2027. The vessels are built by South Korean and Chinese shipyards.

The company described the move as a unique opportunity to increase its footprint in the conventional gas and energy transition gas sectors while retaining the core focus on LNG.

CPLP expects to fund this transaction using cash obtained primarily from container vessel sales and debt financing.

The company further noted that the delivery schedule is attractive with demand fundamentals for the LPG, ammonia, and carbon capture, utilization, and storage (CCUS) business expected to be very strong going forward.

The MGCs in this investment are aligned with CPLP’s strategy of acquiring high-specification, versatile vessels, which can offer charterers reduced unit freight costs. The vessels are new generation of MGCs that are dual fuel (can burn both LPG and fuel oil) and have shaft generators, as well as other energy-saving devices, while they offer an increased capacity of 15%-30% compared to older generation MGCs.

On the other hand, the company believes that acquired LCO2 carriers will place CPLP at the forefront of energy transition shipping as they can transport liquid CO2, LPG, and ammonia. Featuring a low-pressure system, they ensure the lowest unit freight cost and are being constructed at high operational specifications, including but not limited to, multiple cargo systems, reinforced cargo tanks, bow and stern thrusters and ice class capabilities, the company explained.

Furthermore, the vessels are alternative-marine-power-ready and with options for ammonia propulsion and/or onboard carbon capture, thus potentially significantly reducing carbon emissions. With the capacity to move more than 1 million tonnes of liquid CO2 annually, these vessels are expected to be the workhorses of the ammonia and liquid CO2 industries, CPLP said.

On May 31, CPLP also took delivery of Assos, the 174,000 cubic meter LNG carrier built by Hyundai Heavy Industries as part of the umbrella agreement from 2023 to acquire 11 LNG carriers. The vessel commenced its ten-year employment with Tokyo Gas.

The second vessel from this agreement, the Axios II, was delivered to the company in January 2024.

Related Article