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FLEX LNG to Add Five LNG Vessels into Its Fleet
= Approx. US$900 million in total, its fleet to be expanded to 13 vessels =
Norwegian LNG shipping company FLEX LNG is likely to acquire additional five new LNG newbuildings, according to its announcement on 10th. Geveran Trading, FLEX LNG's largest shareholder, has decided to purchase five state-of-the-art vessels now under construction in South Korea for over US$900 million. Amid expectations of LNG demand growth mainly in Asia, gas liquefaction capacity will be significantly expanded worldwide, and the Company is strengthening its fleet in response to this.

The cutting-edge vessels are called the fifth generation, of which three are high-end MEGI vessels being constructed by Daewoo Shipbuilding and Marine Engineering (DSME) and two are X-DF vessels being constructed by Hyundai Samho Heavy Industries (HHI). The acquisition cost is $180 million per vessel, plus $6 million per MEGI vessel for the expansion of full reliquefaction units.

DMSE's three vessels will be completed in 2020 and HHI's two vessels in 2021. With the acquisition, FLEX LNG's LNG fleet will be expanded to 13 vessels — it is now operating four and constructing four in South Korea.

This is the second expansion in this year for the Company. It announced acquisition of two vessels to increase its fleet to eight in this May.

The Norwegian shipping company is in a hurry to strengthen its fleet as global gas liquefaction capacity is expected to skyrocket due to expected LNG demand growth. Actually, new LNG projects will be launched in the US, Australia, Russia etc. during 2018-2022 and a liquefaction capacity of 96.5 mtpa will be added. Meanwhile, the number of LNG vessels to be constructed during the period is 90, and hence it is forecast to be short of about 40 vessels to meet the future capacity.

Besides, if further FIDs for new projects are made to cope with global LNG shortage expected in the early-2020s, further vessels will be needed.

The Company had initially targeted offshore LNG production vessels, been committed to developing floating, storage, regasification units (FSRUs), but has changed its strategy and is now focusing its resources on LNG delivery business, as its core business. It plans US$300 million increase in capital for the acquisition of the five vessels.

The first its own LNG vessel "FLEX Exdeavor" was constructed in 2018. After that, three vessels were added, of which two are engaged in delivery under contracts with Germany's Uniper and France's Total. The Company has been accumulating results in LNG delivery market.
last modified : Thu 18 Oct, 2018 [10:16]
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