MISC Inks Time Charter Deals for Two LNG Carriers

MISCImage Courtesy: MISC

MISC Berhad has signed two time charter contracts with LNG Shipping S.p.A. (LSS), a 100% owned subsidiary of Eni S.p.A, for two LNG carriers.

The ships in question are ENI’s LNG Portovenere and LNG Lerici, built by Fincantieri in 1997 and 1998, respectively.

As informed, the time charter contracts are pursuant to a sale agreement between LSS and MISC, which resulted in MISC acquiring the two vessels from LSS.

The two 65,000 cbm LNG carriers, which are currently trading in the Asia Pacific region, will be used to transport LNG cargoes to meet the MISC’s trading needs in the international waters, the company said.

The five-year charter period will tentatively commence in December 2018 for LNG Portovenere and in January 2019 for LNG Lerici, with an estimated combined contract value of USD 133 million.

“Acquisition of the two vessels as well as the TCPs will further strengthen MISC’s position (…) by boosting the strength of our fleet as well as our capacity to support the LNG demand worldwide. This business opportunity supports the MISC2020 strategy for our LNG business segment in expanding our portfolio of customers,” Yee Yang Chien, MISC’s President / Group Chief Executive Officer, commented.

“In view of the evolving marketplace, there is certainly potential for us to diversify our solutions by including mid-scale and small-scale LNG transportation especially with the growing spot market demand for LNG trading and this will enable MISC to develop our capability in the trading of multiple-size vessels as well as our reach to other global locations,” he added.

Yee further said that the mid-sized LNG carriers have the potential to be converted into mid-sized floating storage regasification unit (FSRU), floating storage unit (FSU) or other alternative LNG floating solution projects upon expiry of the charter.

Currently, MISC’s LNG fleet comprises 28 LNG carriers and two FSUs with a combined deadweight tonnage capacity of over 2 million dwt.

Earlier this month, MISC announced its financial results for the 9-month period ended September 30, 2018, showing that the group posted a 15.9% lower revenue. The revenue stood at MYR 6,391.8 million in the first nine months of this year, against MYR 7,603.2 million seen in the corresponding period last year.

The decrease in revenue was mainly from the offshore segment as the corresponding period included a recognition of a one time gain for Gumusut-Kakap Semi-Floating Production
System (L) Limited (GKL) variation works arising from the favorable adjudication decisions in 2017 and lower construction revenue for FSO Benchamas 2 in the current period. The revenue was also dampened by the LNG segment and petroleum segment.

Group profit before tax of MYR 988.8 million was lower than the corresponding period’s profit before tax of MYR 1,961.5 million caused by the decrease in MISC’s operating profit.

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