LNG

GasLog LNG Ltd., the operator with a fleet 35 LNG carriers under its control and with four others under construction, reported a rise in revenues but a decline in first-quarter profits to $71.05 million compared with $84.24M in the prior-year quarter.

“The decrease in profit is mainly attributable to the decrease in profit from operations, which is mainly affected by an impairment loss,” said the company.

GasLog posted an increase in quarterly revenues to $213.72M compared with 205.32M in the same three months of 2021.

“The increase in revenues is mainly attributable to an increase from the deliveries of wholly-owned GasLog vessels. This increase was partially offset by decreased revenues mainly from GasLog Partners’ vessels operating in the spot market in the first quarter of 2022,” explained the Piraeus, Greece-based company.

Among the GasLog fleet of 39 LNG ships, 19 are owned by GasLog, five have been sold and leased back by GasLog under long-term and of the remaining 15 LNG carriers, 14 are owned by the company’s subsidiary, GasLog Partners, and one has been sold and leased back by GasLog Partners.

GasLog completed a merger in June 2021 with BlackRock’s Global Energy and Power Infrastructure (GEPIF) fund and de-listed its common shares from the New York Stock Exchange.

Ownership structure

GasLog’s ownership structure has three main shareholders in both companies, parent GasLog Ltd and subsidiary GasLog Partners LP.

They are the Greek Livanos family with 55 percent, the Monaco-based Onassis Foundation with 12 percent and BlackRock’s GEPIF, holder of 45 percent of the equity.

As of the end of March 2022, GasLog had $3.5 billion of debts outstanding under its credit facilities and bond agreements, of which $234.9M is repayable within one year.

Among first-quarter highlights, the Greek floating LNG terminal project including GasLog and led by the company Gastrade SA to deploy two Floating Storage and Regasification Units (FSRUs) off Greece, was making progress after a final investment decision.

Alexandroupolis

“GasLog, through its subsidiary GAS-fifteen Ltd., issued a final notice to proceed to Keppel Shipyard (Singapore) to convert the ‘GasLog Chelsea’, a 153,600 cubic metres tri-fuel, diesel-electric propulsion (TFDE) LNG carrier built in 2010, into an FSRU in connection with the FID taken by Gastrade for the construction of a regasification terminal in Alexandroupolis,” explained the company.

GasLog has entered into an agreement for the sale of the “GasLog Chelsea” to Gastrade for $265.1M, payable in instalments following its conversion to an FSRU expected to be completed by the fourth quarter of 2023.

GasLog noted that it also completed a sale and lease-back deal on the “GasLog Skagen”, a 155,000 cubic metres capacity TFDE LNG carrier built in 2013, with a wholly owned subsidiary of China Development Bank Leasing (CDBL).

This released $21.5M of incremental net liquidity to the Group. The vessel was sold and leased back under a charter with CDBL for a period of five years with no repurchase option or obligation.

“The vessel remains on its charter with Chevron Asia Pacific Shipping,” said GasLog.

Among new charter agreements in the first quarter, GasLog extended the time charter of the “GasLog Salem” with a wholly owned subsidiary of commodities firm Gunvor for an additional 12 months.

The company also signed a new one-year time charter party agreement for the “GasLog Singapore” with Singapore LNG Corp.

In another deal, subsidiary GasLog Partners LP signed a new multi-month time charter agreement for the “GasLog Sydney” with Spain-based utility Naturgy Energy.

Bulgaria said that work had begun on the construction of a new Bulgaria-Serbia Balkan natural gas interconnector with plans for the pipeline to become operational in October 2023 and to enable supplies to come from two Greek LNG import terminals.

These links to the expanding Balkan natural gas market will come from the existing Greek LNG import terminal at Revithoussa operated by the Hellenic Gas Transmission System Operator (DESFA) near Athens, and the proposed new floating LNG project at Alexandroupolis in eastern Greece.

The 170 kilometres (105.6 miles) Bulgaria-Serbia interconnector is separate from the TurkStream link of Russian natural gas supplier Gazprom and will run from the Bulgarian capital Sofia via Dimitrovgrad in Serbia to the city of Nis in southern Serbia, giving the Serbs a non-Russian supply option for the first time.

It will enable Serbia to import natural gas via Greece and Bulgaria from the Southern Gas Corridor bringing gas from Azerbaijan on the Trans-Adriatic Pipeline (TAP) to southern Europe and as regasified LNG from the two Greek LNG terminals.

The Bulgaria-Serbia interconnector is supported by the European Union as a Project of Common Interest and has secured a €49.5 million ($56.5M) grant from the EU.

The EU grant comes from the EU Instrument for Pre-accession Assistance as Serbia is not an EU member is simply in the “waiting room”.

The Bulgaria-Serbia pipeline has also secured €25M from the European Investment Bank loan of €25M.

Regasfied LNG

The pipeline will have a capacity of 1.8 billion cubic metres per annum in the direction Bulgaria-Serbia with the possibility also of reverse flow.

There are additional plans for a new interconnector to link the gas grids of Greece and the former Yugoslav nation of North Macedonia.

The gas grid operators of the two countries in September 2021 signed a new gas cooperation agreement, a key step ahead of construction of the new link.

The 123 km pipeline will have an initial capacity of 1.5 Bcm per annum with possible doubling of capacity. A final investment decision is expected before the end of the second quarter of 2022.

The Balkans have been historically dependent on Russian gas imports, though can also receive gas from Azerbaijan on the TAP pipeline and regasified LNG from the Revithoussa terminal.

Greece's Gastrade at the end of January 2022 took the final investment decision for the planned 5.5 Bcm per annum floating LNG import terminal at Alexandroupolis in northern Greece, paving the way for the project to begin operations by the end of 2023.

Gastrade SA, the Greek company developing an FLNG facility, took the FID with joint venture partners, including Bulgaria’s transmission company Bulgartransgaz.

GasLog FSRU

The FSRU will be provided by Greek shipping company GasLog and be connected to the DEFSA system by a 28km pipeline.

Regasified LNG entering the terminal will be able to flow onward to other markets in the region.

Bulgaria is also building a new interconnector with Greece called the Interconnector Greece-Bulgaria (IGB) allowing Azerbaijan's gas on the TAP pipeline to flow northward to Bulgaria and for the regasified Greek LNG to reach Bulgaria and then Serbia.

The IGB pipeline is scheduled to come on stream in July 2022.

Bulgarian Prime Minister Kiril Petkov has just completed a visit to Serbia to discuss energy issues and the pipelines and LNG supplies with his Serbian counterpart, Ana Brnabić.

“There is great potential to create a single gas trade market involving Bulgaria, Serbia, North Macedonia and Greece,” stated Petkov during his visit to the Serbian capiatl Belgrade.

“We need to bring together the volumes of gas consumption in the whole region so that we can negotiate together for lower prices,” Petkov told a joint news conference with Serbian PM Brnabić.

“Our gas connectivity will be a huge priority. The Greek connection is very important for Bulgaria, and through the connection with Serbia you will have the opportunity to receive LNG and Azerbaijani gas,” added Petkov.

Brnabić, who attended the ceremony to mark the start of the pipeline construction, said that the gas pipeline would be ready for operation by October 2023, coinciding with the start-up of the Alexandroupolis FLNG facility.

Petkov told the news conference that Serbia’s future membership of the EU was a huge priority for Bulgaria.

Brnabić thanked Petkov for making the visit, saying that he was the first Bulgarian head of government to come to next-door neighbour Serbia since 2013.

The European Commission has approved EU funding of the new floating liquefied natural gas import terminal for Greece and the Balkans being developed offshore the port of Alexandroupolis by Greek company Gastrade.

The project using a floating storage and regasification unit (FSRU) will have an overall delivery capacity of around 4 million tonnes per annum of LNG.

The subsea and onshore sections of the gas transmission pipeline will transmit LNG from the floating unit to the Greek natural gas network and onwards to third countries in the Balkans.

“The EU State aid will amount to €166.7 million ($200M) as the FLNG project contributes to the security and diversification of energy supplies in Greece and, more generally, in the region of Southeast Europe, without unduly distorting competition,” said the Commission statement.

Executive Vice-President Margrethe Vestager, in charge of EU competition policy, stated that the new LNG terminal in Alexandroupolis would improve regional gas supply and infrastructure.

“This will contribute to achievement of the EU's goals in terms of security and diversification of energy supply,” added Vestager.

“The Greek support measure limits the aid to what is necessary to make the project happen and sufficient safeguards will be in place to ensure that potential competition distortions are minimised,” declared the Commissioner

Greece had notified the Commission of its plans to support the construction of the Alexandroupolis terminal, also consisting of offshore installations such as a mooring system and risers as well as subsea and onshore gas transmission pipelines.

“Given its strategic importance for the diversification of natural gas supplies into the Southeast European region, the LNG terminal in Alexandroupolis has been included in the list of European Projects of Common Interest in the energy sector,” said the Commission.

“The terminal is expected to improve security of supply not only for Greece, but also for Bulgaria and for the wider European region, as it will constitute a new potential energy source to feed into the interconnector between Greece and Bulgaria,” it added.

The project will be financed by the Greek state using European Structural and Investment Funds (ESIF), notably funds directly controlled and managed by Greece under the 2014-2020 partnership agreement for the development.

“The beneficiary of the aid is Gastrade SA, a company in which the Greek gas incumbent (DEPA) and the Bulgarian gas Transmission System Operator (Bulgartransgaz EAD) hold a participation,” it added.

GasLog Ltd, the LNG carrier fleet owner with 36 ships split with its US affiliate GasLog Partners, posted a first-quarter 2020 loss as LNG demand faced multiple headwinds.