Oslo-listed very large gas carriers (VLGCs) specialist Avance Gas reveals what are the intentions of the company for the remainder of its fleet, after the deal reached recently with BW LPG Ltd to sell its fleet of very large gas carriers (VLGC) for a consideration of $1,050m.
With the sale of all its VLGCs, the shipowner is left now with four MGC newbuilds for delivery in the fourth quarter of 25 to fourth quarter of 26.
The company is now in the process of evaluating the best way forward for maximizing the value of these assets, Øystein Kalleklev, chief executive officer of Avance Gas Holding Ltd said in the company’s consolidated interim financial statements.
“Since we contracted the ships last summer, the newbuilding price for such vessels has increased by approximately 15 percent while delivery slots have moved from 2025/2026 to 2027,” noted Kalleklev.
The top management also expressed the company’s confidence that it will generate attractive returns from these assets either by contracting them on time charters, selling the ships, or developing Avance Gas into an MGC/ammonia company by actively engaging with other owners with similar assets with the aim of developing a company with sufficient scale.
As the chief executive said, with only 12 VLGCs left in the fleet, the company concluded that it was in the best interest of their shareholders to pursue a sale of the remaining ships.
“This decision was mostly driven by a somewhat subscale operation; it’s difficult to compete with a smaller fleet, while at the same time, second-hand prices for VLGCs are at a historical high level, making it attractive to sell our ships,” he pointed out.
To remind, the owner will now own – after the deal reached to sell the remaining 12 VLGCs to BW LPG Ltd – four dual fuel medium-sized gas carriers (MGC) capable of transporting full ammonia cargoes, hold a 12.77% shareholding in BW LPG, and a substantial cash holding.
The transactions and delivery of VLGC ships to the buyer is scheduled to take place in the window September 15 to December 31.
“With the transaction, BW LPG adds scale while at the same time renewing their fleet. For Avance Gas, we benefit financially by selling our ships at a very attractive price, which will allow us to return significant capital to our shareholders,” highlighted the chief executive Kalleklev.
