Avenir LNG pivots to pure play shipping and trading, eyes potential Oslo listing

In a major strategic realignment, UK-based midstream LNG & BioLNG company Avenir LNG has revealed its intent to divest from the HIGAS LNG storage terminal in Sardinia, Italy, as part of a shift to ‘exclusively’ focus on providing ‘efficient and sustainable’ small-scale liquefied natural gas (LNG) supply solutions.

As disclosed, aside from divesting its ownership of the Sardinian terminal to three majority shareholders, namely Stolt-Nielsen, Golar LNG and Höegh Evi, Avenir is concurrently seeking to raise capital and pursue a listing on the multilateral trading facility Euronext Growth Oslo.

This is said to be done in order to support the company’s expansion plans, which include the construction of brand-new LNG-powered vessels.

Jonathan Quinn, Managing Director, Avenir LNG, highlighted that with the LNG fuelled fleet set to grow from 400 vessels in 2023 to a thousand by 2028, the demand for bunker vessels is likely set for ‘robust’ growth over the next decade.

“This is a timely opportunity to refocus and consolidate the company’s strategy into shipping and trading by divesting from HIGAS. This transaction will enhance our position as a pure play owner of LNG bunker vessels and improve operational efficiency,” he said.

The LNG market has proven favorable, allowing companies to capitalize on the market’s ‘stalwart’ drivers, such as favorable regulatory developments, constrained supply and a substantial increase in the LNG-driven fleet, all which are expected to greatly boost marine LNG demand beyond 15 million tons per year over the next five years, as per Avenir LNG.

Avenir LNG welcomed numerous liquefied natural gas-powered vessels over the past years. In April 2024, the company ordered two 20,000 cbm LNG bunker and supply vessels from China’s Nantong CIMC Sinopacific Offshore & Engineering (SOE),a subsidiary of CIMC Enric. The 160m long ships are slated for delivery in Q4 2026 and Q1 2027.

In July this year, Vitol International Shipping, a shipping company of energy and commodities group Vitol, hired an LNG bunkering vessel via a time charter agreement with Avenir LNG. The charter pertained to Avenir’s first newbuild 20,000 cbm LNG bunker vessel. As explained, it will start at delivery from CIMC Sinopacific Offshore & Engineering (CIMC SOE) shipyard in Nantong, China in 2026 and will serve a period of seven years with options to extend up to ten years.

Just months before that, Avenir LNG signed a shipbuilding contract with CIMC SOE, which is a subsidiary of CIMC Enric, for two 20,000 cbm LNG bunker & supply vessels. The newbuilds are said to possess ‘maximum’ compatibility and versatility for loading and discharging LNG and BioLNG to a wide range of receiving vessels and terminals.

In connection with the latest Euronext Growth Oslo listing, Avenir LNG has stated that it plans to raise approximately $50 million in new equity, fully underwritten by Stolt-Nielsen, in order to fund the two newbuilds.

The divestment is projected to be implemented prior to any listing via a restructuring of Avenir LNG. As per a statement from the company, the indirect equity interests in the HIGAS LNG storage terminal are set to be transferred to a newly incorporated vehicle, owned by the majority shareholders.