Samsung Heavy to build two LNG carriers for GasLog

18 August 2013 (Last Updated August 18th, 2013 18:30)

South Korea's Samsung Heavy Industries (SHI) has won a contract from GasLog for the construction of two 174,000cbm tri-fuel diesel electric liquefied natural gas (LNG) carriers.

South Korea’s Samsung Heavy Industries (SHI) has won a contract from GasLog for the construction of two 174,000cbm tri-fuel diesel electric liquefied natural gas (LNG) carriers.

The LNG carriers are scheduled to be delivered in the third and fourth quarters of 2016.

Following delivery, the vessels will start a seven-year charter with a subsidiary of BG Group, and are expected to generate combined annual earnings before interest, tax, depreciation and amortization (EBITDA) of around $46m-$47m in the first year of operation.

The contract also includes an option for six additional vessels, four of which are priced, with provisional deliveries scheduled up to the end of 2017.

According to GasLog, compared to the two LNG carriers ordered in February 2013, the new vessels will have a lower delivered cost due to the benefits accrued from building a series of ships.

"The new vessels will have a lower delivered cost due to the benefits accrued from building a series of ships."

With the addition of LNG tanker Skagen, GasLog currently has a fleet of 14 ships, six of which have been delivered and are on charter, while the remaining eight are either under construction or to be built.

Two of the chartered vessels will be delivered to Shell, with the remaining four going to BG Group.

GasLog CEO, Paul Wogan, said the contracts will strengthen its strategy of providing high quality ships for charter to customers.

"It also supports our view that GasLog, as one of the world’s leading LNG shipowners, is well placed to continue to benefit from the long-term secular growth of the LNG market," Wogan said.