BW LPG acquires dual-fuel and scrubber-fitted VLGCs from Avance Gas in $1 billion move

Singapore-based owner and operator of LPG vessels BW LPG has signed agreements to acquire twelve very large gas carriers (VLGCs), four of which are dual fuel, from Norwegian shipping company Avance Gas.

The transaction worth over $1 billion encompasses four 91,000 cubic meter dual-fuel VLGCs, of which two are 2022-built and two are 2023-built, and eight 2015-built 83,000 cubic meter VLGCS of which six are scrubber-fitted.

By May 2023, Avance Gas took delivery of four 91,000 cubic meter dual-fuel VLGCs from South Korean shipbuilder Hanwha Ocean.

The acquistion is expected to add significant scale to BW LPG’s fleet by increasing the number of owned and operated VLGCs from 41 to 53, of which 22 are LPG dual fuel.

According to BW LPG, the move solidifies the company’s position in the VLGC sector and comes at an opportune time with VLGC newbuild deliveries abating and continued growth in global LPG export volumes.

Consent from the lessor of two sale-leaseback facilities, and the charterers of three time-charter parties, is to be obtained before delivery of five of the vessels. Closing of the transaction will take place on a vessel-by-vessel basis targeted to be completed by December 31, 2024.

Andreas Sohmen-Pao, Chairman of the Board of BW LPG, commented: “This strategic transaction supports BW LPG’s ambition to serve our customers with enhanced shipping and product delivery options in the fast-growing LPG space. The addition of these 12 vessels will result in an expanded fleet, greater flexibility, and are expected to be accretive to earnings based on our market view. They will also support our product trading and terminal activities.”

Kristian Sørensen, CEO of BW LPG, said: “Today’s transaction marks a major milestone in BW LPG’s history and reflects our ability to execute large fleet acquisitions by maintaining a robust balance sheet and using the BW LPG share as an attractive currency. The acquired vessels will further enhance our commercial scale and increase our operational leverage in a market we expect to be strong in the coming years and as such solidify earnings and dividend potential.”