BW LPG takes over second VLGC from Avance Gas, continues fleet renewal with new strategic sale and purchase

Singapore-based ship owner and operator BW LPG has taken delivery of the second of twelve very large gas carriers (VLGCs) acquired from Norwegian shipping company Avance Gas under the $1 billion deal in August 2024. At the same time, the company is pressing ahead with its fleet renewal program through new sale and purchase of VLGCs.

BW LPG said BW Capella, a 91,000 cubic meter (cbm) dual-fuel ship built in 2022, was delivered on November 20, 2024. The vessel was under a sale-leaseback agreement, which has been novated to BW LPG. In connection with the delivery, 2.1 million shares in BW LPG were issued to Avance Gas. Additionally, the Norwegian company received net cash proceeds of $15 million.

To remind, on August 15, 2024, Avance Gas decided to sell twelve VLGCs, four of which are dual fuel, to BW LPG, for $1.05 billion. The first vessel delivery and transaction was completed on November 1.

The remaining ten vessels are scheduled for delivery to BW LPG prior year-end, with three deliveries expected in November and seven in December.

In a separate announcement issued on November 19, BW LPG revealed the sale of the 2007-built BW Cedar and the exercise of a purchase option for the 2019-built BW Kizoku as part of its strategic fleet renewal push.

As informed, BW LPG India, BW LPG’s 52% owned subsidiary, decided to sell its 82,291 cbm gas carrier BW Cedar for approximately $65 million. The vessel will be delivered to an undisclosed new owner in the first quarter of 2025.

Additionally, BW LPG exercised a purchase option for the 83,325 cbm BW Kizoku which is currently on time charter with the company. The purchase option was exercised for a consideration of $69.8 million.

The vessel is slated for delivery in January 2025 and will continue to trade in BW LPG’s conventional fleet.

Kristian Sørensen, CEO of BW LPG, said: “Through these transactions, we are renewing our fleet by capitalizing on strong asset prices in the second-hand market for older vessels while acquiring a modern vessel at a competitive price translating to a new building equivalent of US$ mid-80 million. This example of asset play shows the optionality and ability for value creation that our platform and business model provide.”