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LNG Shipping: Time to Ship Out?

By Peter Staas on Apr. 12, 2014

Although GasLog (NYSE: GLOG) completed its initial public offering (IPO) in early 2012, the conservatively run shipowner has managed BG Group’s (LSE: BG/, OTC: BRGYY) fleet of LNG carriers for more than a decade.

After the acquisition of six older LNG carriers from BG, the company’s on-the-water fleet will consist of 15 vessels, 11 of which operate under fixed medium-term charters. The first of these agreements roll off in 2015 and 2016, though the customer has an option to extend the terms of both deals.

Over the next two years, GasLog will take delivery of six newly built vessels, four of which have secured fixtures with either BG Group or Royal Dutch Shell (LSE: RDSA, LSE: RDSB; NYSE: RDS A, RDS B). GasLog’s close relationship with BG Group and Royal Dutch Shell makes us less concerned about these two vessels finding charter work.

Last fall, shares of GasLog surged after the company announced plans to create an MLP to monetize some of its assets that operate under longer-term charters.

The parent will contribute three vessels that operate under intermediate-term charters to BG Group, and GasLog Partners LP will have the option to purchase nine of GasLog’s existing and new-build vessels.

Shares of GasLog surged after management announced the long-awaited formation of GasLog Partners LP.

We’ve covered this stock since its IPO; readers sitting on big gains should consider taking their profits off the table and letting their initial investment ride.

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