Höegh LNG buys CoolCo’s LNG carrier, eyes FSRU conversion opportunities

Norwegian shipping company Höegh LNG has entered into an agreement with Cool Company (CoolCo) to acquire the 2013-built LNG carrier Golar Seal.

Golar Seal and Golar Freeze. Courtesy of Golar LNG

Under the agreement, Höegh LNG will buy the carrier with 160,000 cbm capacity for $184.3 million.

The transaction is expected to close on the redelivery of the vessel from its current charter in late March or April 2023. The buyer intends to subsequently employ the vessel in the carrier market on a term time charter.

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Richard Tyrrell, CEO of CoolCo, which was established in 2022 with Eastern Pacific Shipping and Golar LNG as shareholders, said: “Through the sale of the Golar Seal, the earliest vessel in our fleet to be built, we are demonstrating our disciplined approach to locking in shareholder value. The valuation highlights the re-pricing of the LNG carrier market and the strategic value of such LNG infrastructure assets. A 2.5x cash-on-cash return in little more than 12 months since CoolCo’s formation shows a considerable upside in our fleet.

“The transaction releases approximately $94 million in cash that will be available in the event the company decides to exercise its option agreement on two highly sought-after Hyundai Samho vessels, now scheduled for delivery ahead of contract in the second half of 2024.”

Commenting on the acquisition, Erik Nyheim, President & CEO of Höegh LNG, said: “We are very pleased to make this investment which underpins our growth ambitions. The vessel will be an excellent addition to our fleet, and provide flexibility to pursue FSRU conversion opportunities.”

In other company-related news, Höegh LNG recently signed a new loan facility agreement with a group of banks to refinance two floating storage and regasification units (FSRUs) employed on long-term contracts in Germany.

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