LNG

TC Energy Corp., the North American pipelines company and supplier of LNG feed gas, said a transaction had been agreed to sell Portland Natural Gas Transmission System (PNGTS) for US$1.14 billion including debts to funds of BlackRock and Morgan Stanley Infrastructure Partners.

TC Energy has a partner in the PNGTS asset called Northern New England Investment Company, which is a subsidiary of Énergir L.P.

The sale to BlackRock, through a fund managed by its infrastructure business, and investment funds managed by Morgan Stanley Infrastructure, is for a gross price of US$1.14Bln, which includes the assumption of US$250 million of outstanding senior notes held at PNGTS.

PNGTS is a 475-kilometres (295-mile) FERC-regulated transporter of natural gas serving the upper New England and Atlantic Canada markets.

Natural gas flows

The pipeline receives natural gas from the Trans-Quebec and Maritimes (TQM) Pipeline via the Canadian Mainline.

TC Energy said it would provide customary transition services and would work jointly with the buyers to ensure the safe and orderly transition of “this critical natural gas system”.

The Calgary, Alberta-based company’s other key assets include the completed Coastal GasLink in British Columbia to supply feed gas to the LNG Canada project which advancing commissioning activities.

The PNGTS transaction implies a valuation of approximately 11.0 times reported 2023 comparable EBITDA.

“This announcement represents continued progress toward achieving our 2024 strategic priority of enhancing our balance sheet strength by delivering approximately $3 billion in asset divestitures,” said François Poirier, TC Energy’s President and Chief Executive.

“We are committed to reaching our 4.75 times debt-to-EBITDA upper limit by year-end and expect to have further asset divestiture announcements through the year,” Poirier added.

Asset sales

“This sale of a non-core asset at a strong valuation is a unique opportunity to support our capital rotation and deleveraging priorities while continuing to meet the needs of the communities PNGTS serves,” the CEO said.

TC Energy added that cash proceeds from the deal would be split pro-rata according to the current PNGTS ownership interests of TC Energy 61.7 percent and Énergir 38.3 percent and will be paid at closing subject to customary adjustments.

“As part of the transaction, the buyers will assume the outstanding senior notes held at PNGTS and currently consolidated on TC Energy’s balance sheet,” said TC Energy.

“The transaction is expected to close in mid-2024, subject to the receipt of regulatory approvals and customary closing conditions,” it added.

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.

Höegh LNG Holdings, the floating terminal projects company with 12 vessels and contracts for China and India, has been acquired in a takeover by Norwegian interests and a unit of US investment bank Morgan Stanley after a vote by shareholders held in Bermuda.