LNG

Chart Industries Inc., the LNG equipment-maker and industrial gas technology company, has received all regulatory approvals to close the acquisition of UK engineering firm Howden for a purchase price of $4.4 billion from affiliates of KPS Capital Partners LP.

“Howden is a leading global provider of mission critical air and gas handling products providing service and support to customers around the world in highly diversified end-markets and geographies,” said Chart.

Howden manufactures highly engineered fans, compressors, rotary heat exchangers, steam turbines, and other air and gas-handling products, services and solutions.

Chart, based in Atlanta, Georgia, has funded the acquisition through a combination of cash and shares of a newly created class of preferred stock.

The UK company is headquartered in Renfrew, Scotland, and employs more than 6,500 people globally in 35 countries, including more than 750 engineers.

In the LNG sector alone, Chart has become a leading supplier of technology for major LNG projects under construction on the US Gulf Coast and is involved in providing regasification and LNG transportation equipment around the world, including in Europe and Asia.

New York-based fund KPS acquired Howden in 2019 from Colfax Corp. in a highly complex global corporate carve-out transaction.

Synergies

Chart said it had identified significant commercial synergies in the takeover that are expected to reach $350M annually by year three.

The US company said the combination of Chart and Howden furthers its global leadership position in highly engineered process technologies and products serving clean power, clean water, clean food and clean industrials.

Chart also announced it was scheduled to present at the Bank of America Global Industrials Conference in London on March 21 at 12:15 pm Greenwich Mean Time (8:15 am. Eastern Time).

Chart Chief Executive and President Jill Evanko is scheduled to be the presenter at the BoA event.

The Society for Gas as a Marine Fuel (SGMF) has released its most detailed version yet of a publication of operational guidelines to enhance safety during the marine bunkering of LNG fuel.

The SGMF said this third revision of “LNG as a marine fuel - Safety and Operational Guidelines - Bunkering” is the most comprehensive coverage of all aspects related to LNG bunkering operations.

“The maritime industry is increasingly adopting LNG as the fuel of choice for newbuild vessels,” said the Society.

“Together with the environmental performance LNG use provides, this growing trend is also the result of the considerable expansion of the LNG bunkering supply infrastructure,” it added.

“Facilities are now well established in most parts of the world, and there are more operational LNG bunkering vessels serving the industry than ever before,” stated the SGMF.

In anticipation of this growth and beyond, the safe use of LNG as a marine fuel has been a priority issue for SGMF.

Insights

“The information contained in this publication is gold dust for anyone bunkering an LNG fuelled ship,” said the Chairman of the SGMF Samir Bailouni, who is also Chief Operating Officer of Qatari gas shipping line Nakilat.

“These practices and insights are collated from the best the industry has to offer, and I extend my thanks to our members for providing this invaluable information not only for the benefit of the industry, but for society as a whole,” stated Bailouni.

The first published version of the SGMF’s LNG bunkering guidelines was in 2014 and it has now been “significantly updated and revised for 2022”.

The SGMF said the guidelines are recommended by the society as a “must have” for anyone engaged with any aspect of LNG bunkering.

“The safety track record of LNG bunkering operations has been exceptional and SGMF has played a leading role in developing a ‘safety first’ approach to bunkering operations through its publications, work, and influence,” declared the SGMF.

The SGMF noted that among its membership organisations there were tens of LNG bunkering ships operating with hundreds of ships using LNG between them and with LNG bunkering occurrences now in their thousands.

The publication covers not only actual operations, but also the actions and activities leading up to that final stage, making the bunkering efficient and safe.

“The overall aim of this new publication is to ensure that gas-fuelled ships can be bunkered safely, reliably, efficiently, and in an environmentally responsible way,” said Mark Bell, General Manager of the SGMF.

“The industry now has a comprehensive portfolio of publications for LNG as a marine fuel and the Society will continue to update them with good, if not the best, practice the industry has to offer,” he added.

Grupo HAM of Spain, the LNG and gas fuel infrastructure company, said it partnered with Peruvian firm Limagas to build the first LNG and compressed natural gas station in the South American nation of Peru, an LNG exporting nation.

The station is on one of the main avenues of the city of Cuzco, located in the Peruvian Andes.

The service station currently offers its customers CNG and with its two double dispensers and 80 cubic metres LNG tank will soon be filled with fuel.

“The Cuzco CGN-LNG gas station is the first of three planned natural gas stations in Peru, including a second station in Cuzco and another to be opened at Quillabamba during 2021,” said HAM.

With these new projects, HAM continues to help promote the use of LNG and CNG in South America, where its subsidiary HAM Chile was chosen by local Chilean company Empresas Lipigas to design, construct and commissioning the first LNG fuel in Chile.

HAM’s Peruvian project partner Limagas is an affiliate of Empresas Lipigas.

This station will be sited at fuel facilities of Transportes San Gabriel in Linares, 300 kilometres south of the Chilean capital Santiago.

While Chile is an LNG importer, Peru has been an LNG exporter since 2010 with a plant at Pampa Melchorita comprising two liquefaction Trains and annual output of around 4 million tonnes per annum.

HAM said that the Cuzco station is on Avenida la Cultura, which extends from west to east between the districts of Cuzco, Wnachaq, San Sebastián and San Jerónimo, with significant vehicle traffic.

During the station’s inauguration, the authorities of the Regional Government of Cuzco said that having a natural gas filling station changed the nation’s energy matrix and would help lower fuel costs.

HAM now has a network of 75 LNG and CNG stations. They are located mostly in Europe with 30 in Spain, 16 in Italy, 12 in the Netherlands, nine in Belgium and eight in France, all sited at strategic points for truck transport.

Chart Industries, the US LNG equipment-maker, said orders in the third quarter rose 7.4 percent from the previous three months as LNG fuel infrastructure demand filled a gap left by a pause in orders from large LNG ventures on the Gulf Coast.

Third-quarter net income rose to $21.7 million compared with $18.80M in the same quarter of 2019.

Orders amounted to $262.7M in the three months, particularly in the Distribution and Storage division for hydrogen equipment, water treatment, LNG regas, ISO containers and repair, service and leasing.

The orders were lower than the $338M achieved in the same three months of 2019, though took the backlog to $684.9M, with record levels seen in both the Distribution & Storage Eastern Hemisphere and Distribution & Storage Western Hemisphere units.

“Orders continued to be very strong for LNG infrastructure related equipment, including the highest trailer order quarter since the third quarter of 2018, continued record levels for fueling stations and record order levels for ISO containers,” said Chart.

Chart added that it continued to see strengthening demand across the business with the exception of its Energy & Chemicals FinFans (E&C FinFans) segment where third- quarter orders were down $28.9M when compared to the third quarter of 2019.

Chart's orders of $262.7M were down slightly from the third quarter of 2019, which included a $6.6M air cooled heat exchanger order for Calcasieu Pass LNG.

D&S West and D&S East orders increased 38 percent and 13.9 percent respectively over the third quarter of 2019.

“The strength of our order activity in the third quarter 2020 included multiple records and a very strong start to October orders, even without all industrial gas customers fully back in the field due to continued Covid-19 restrictions,” stated Jill Evanko, Chart’s Chief Executive and President.

Evanko noted that the company took recent steps to expand its hydrogen product offering and expanded long-term agreements would set the stage for strong 2021 results.

Booked orders were with 147 new customers in the third quarter and in the year-to-date numbered 407.

Chart noted in its highlights that it signed 10 new long-term agreements with major customers, including for repair and service, hydrogen and LNG fueling stations.

The third-quarter 2020 HLNG vehicle tank orders were over $20 million, the second highest quarterly level.

“This has been driven by high demand from our customers on long-term agreements, demand for LNG over-the-road vehicles in geographies outside of Europe, including South America, Russia and Japan, and expanded applications for these tanks such as for LNG buses,” said Chart.

“LNG infrastructure and small-scale applications are continuing to expand, and we expect that to continue over the next several years,” the company explained.

“And while big LNG projects remain on the horizon, final Investment decisions have been delayed. Yet even with those delays, in the third quarter 2020, we received an early engineering release for a big LNG terminal for brazed aluminum heat exchangers and cold boxes to be used on the natural gas pre-treatment Train,” said Chart.

After the third quarter, Chart reported the October 2020 divestiture of the cryobiological business for $320M in cash.

Proceeds were used to pay down debt, close the $10M acquisition of US Worthington Industries cryogenic trailer and hydrogen trailer business in Theodore, Alabama, and to invest in French firm McPhy to expand commercial hydrogen opportunities.

Chart reiterated its full-year 2020 guidance of revenue of $1.18 billion and associated diluted adjusted earnings per share of $2.25.

The Atlanta, Georgia-based company said its full-year 2021 outlook was for revenue of between $1.25Bln and $1.32Bln and associated diluted adjusted EPS of between $3.00 and $3.40.

“As we have said on numerous occasions, we consider ourselves the provider of cryogenic equipment regardless of molecule and we believe that there will be a hybrid of renewable energy sources as the clean energy transition continues,” said Chart.

“Hydrogen will be significant in this transition, and with our 50-plus years of hydrogen equipment experience, we will play a key part in the full hydrogen value chain,” the company added.

Sea-LNG, a global coalition led by energy and shipping companies backing the increased use of liquefied natural gas as a maritime fuel, has signed up a Port in Oman in the Arabian Peninsula aiming to be a main LNG base with its own production plant.

The Spanish HAM Group has acquired 11 new LNG-powered truck tractors from Swedish vehicle manufacturer Scania to join its own fleet in the Transportes HAM unit, a leading European company in the road haulage sector.

Chart Industries, the US liquefied natural gas and industrial gases equipment supplier with a widening international presence in Europe and Asia, has authorized the repurchase of up to $75 million of its common stock over the next 12 months. 

Under the stock repurchase program, Chart may purchase shares of its common stock through various means, including open market transactions, block purchases and privately negotiated transactions in accordance with  federal securities laws.

“This stock buyback program reflects our confidence in our business going forward, and we believe our shares are an attractive investment opportunity,” said Chart’s Chief Executive Jill Evanko.

“Our strong cash flow simultaneously enables us to return value to shareholders, pay down debt, and deploy capital for productivity and growth opportunities,” explained the CEO.

Analysts say that companies usually buy back their shares because management considers them undervalued. 

The company buys shares directly from the market or can offer its shareholders the option of tendering their shares.

A share buyback reduces the number of outstanding shares, which can increase both the demand for the shares and the price.

Chart said that the timing and amount of any repurchases under this program will be determined by Chart’s management at its discretion based on a variety of factors, including, but not limited to, trading volume and market price.

The company, whose headquarters are in the suburbs of Atlantic in Georgia, was been building its business in North America during the LNG plant buildout as well as in Europe with trucking fuel equipment and in Asia with proposed joint ventures.

Chart signed a letter of cooperation in February 2020 with ExxonMobil India LNG Ltd, an affiliate of the US  major, and Indian Oil Corp. to focus on delivering LNG by Indian roads, railroads and waterways to spread gas use in the absence of physical pipelines.

The accord upgrades a previous Memorandum of Understanding between Chart in Indian Oil to promote the development of the LNG market in India.

It stated that the companies would focus on modular liquefaction, regasification applications, LNG bunkering, fueling stations and alternative LNG mobile transportation including ISO containers.  

Chart said the new Letter of Cooperation expanded the reach and potential scale within a significantly growing country that has committed to clean energy options.

Chart Industries, the US liquefied natural gas and industrial gases equipment supplier, has signed a letter of cooperation with ExxonMobil India LNG Ltd, an affiliate of the US  major, and Indian Oil Corp. to focus on delivering LNG by Indian roads, railroads and waterways to spread gas use in the absence of physical pipelines.

Hungary has opened its first filling station for liquefied natural gas at Szigetszentmiklos, south of the capital Budapest, as part of the European Union-backed clean fuel network stretching from eastern Poland to Spain.

Chart Industries, the US LNG equipment-maker and supplier to the liquid gas sector, posted a surge in annual sales to $1.08 billion from $842.9 million the previous year amid prospects of up to $500M of potential large LNG-related orders in 2019.