LNG

Golar LNG Ltd shares surged over the weekend as the company entered a definitive agreements with Pan American Energy (PAE) for a 20-year deployment of one of its floating LNG production units in Argentina to tap the vast resources of the Vaca Muerta Shale.

US company Perma-Pipe International Holdings has opened its largest production facility outside North America in Abu Dhabi in the United Arab Emirates to tap into the increasing Middle East production expansion in the LNG, oil and pipeline natural gas sectors.

Perma-Pipe, based in Spring, Texas, said the official opening of the facility was attended by President and Chief Executive David Mansfield and Chairman Jerry Walker as well as dignitaries from the UAE, Saudi Arabia and Qatar.

While Qatar is embarking on a major natural gas and LNG expansion, the UAE and Saudi Arabia are also expanding their natural gas sectors with plans for increased production and subsequent equipment needs.

The US company, which is listed on the Nasdaq global exchange, said the Abu Dhabi factory is on a six hectare site and is fully equipped with technologies to provide the latest environmentally-friendly products for pipelines, gas-gathering and pipe insulation .

“We have every reason to believe that the demand for clean energy, such as LNG and hydrogen, will continue to grow in the years to come,” said CEO Mansfield.

“This new development is not specific to the UAE only. It is an export hub to serve projects all over the world. We now have a factory that is unique with its wide product offerings and with the capacity to respond to the growing demand,” added Mansfield.

Pre-insulated pipes

Perma-Pipe is leader in pre-insulated piping and leak detection systems for oil and gas gathering, district heating and cooling and other applications.

The new facility will offer fabrication and fusion bonded epoxy coating capabilities, and the XTRU-THERM® and PolyTherm® brands of insulation systems and other jacketed and reinforced products.

In total, Perma-Pipe has operations at 14 locations in six countries.

“This new production site opens up many perspectives for Perma-Pipe, the world leader in pre-engineered pre-insulated piping systems,” said Saleh Sagr, Senior Vice President for Perma-Pipe’s Middle East and North Africa region.

“We aim to meet the growing regional demand and also have a logistical position to better serve the oil and gas industry in the UAE with its large capacity and product quality,” Sagr added.

Baker Hughes Company, the US liquefied natural gas equipment-maker and energy services company, reported record orders of $8 billion in the fourth quarter, including for turbo-machinery for LNG production and warned that global spare capacity for oil and gas has deteriorated to the extent it needs a huge investment boost.

Golar LNG Ltd shares plunged almost 8 percent after Chief Executive Iain Ross resigned after nearly four years with the Norwegian-founded LNG shipping and projects company as it was completing the sell-off of assets to US LNG-for-power projects company New Fortress Energy.

Shares in Golar LNG, the carrier fleet operator and project developer, plunged 32 percent on the Nasdaq global exchange after one of its associates was caught up in a Brazilian corruption investigation involving another company.

Tellurian Inc. appears to be set to renew its preliminary liquefied natural gas supply and equity investment deal with Indian importer Petronet LNG as the US firm’s shares jumped by more than 56 percent on the Nasdaq global exchange after leaks by executives.

The California ports of Los Angeles and Long Beach, which in the past were short-listed as possible West Coast LNG import terminal locations, are now using more than 100 gas-powered trucks for port transportation and fueled by the leading developer of LNG filling stations, Clean Energy Fuel Corp.

Chart Industries, the US LNG and industrial gases equipment provider, has priced its underwritten public offering of 3.5 million shares at $73.50 per share to fund a portion of the purchase price of its pending acquisition of Harsco Corp.’s Industrial Air-X-Changers business.

Chart has also granted the underwriters a 30-day option to purchase up to an additional 525,000 shares.

The company estimates that the net proceeds of the offering will be around $248.8 million, or $286.3M if the option to purchase additional shares by the underwriters is exercised in full, after deducting underwriters discounts and commissions and transaction expenses.

Chart’s shares were last trading on June 12 at $74.55 on the Nasdaq global stock exchange, valuing the company at $2.37 billion.

J.P. Morgan Securities, Credit Suisse Securities (USA) and Morgan Stanley & Co. acted as joint lead book-running managers for the offering and Evercore Group and Wells Fargo Securities will act as book-running managers.

Chart’s previously arranged financing consists of a revolving credit facility and a new term loan, both of which were over-subscribed by banks keen to lend.

The share offering was closing on June 14, concurrent with the finalization of the commitment from banks for $1.1 billion in credit facilities.

Chart said the acquisition of Harsco’s Air-X-Changers business was now expected to close on July 1.

“While our proposed offering of common stock was significantly over-subscribed, the associated pricing was at the lower end of our anticipated range,” said Chart Chief Executive Jill Evanko.

“We decided to size the offering to a level that would meet the needs of the business and support our growth and profitability objectives, while also acting in the interest of current shareholders by reducing anticipated dilution,” the CEO explained.

Chart, based in the outskirts of Atlanta, Georgia, agreed in May 2019 to take over Harsco in its fourth acquisition in two years as it continues to receive LNG orders for key equipment.

The Harsco AXC business specializes in gas compression coolers.

The company reiterated its full year 2019 sales forecast of between $1.41 billion and $1.46Bln.

The guidance assumes LNG project revenue in 2019 from the Venture Global Calcasieu Pass and “Golar Gimi” LNG production hull projects of $28M to $30m, subject to project timing.

Harsco AXC is projected to generate net sales of around $260M in 2019, and a 23 percent gross earnings margin as a percentage of sales.

The Chart acquisition is the fourth in the past two years after other takeovers in the US and Europe.

Chart first expanded its business in 2017 by acquiring German company VCT Vogel, a servicer of cryogenic and mobile gas tank equipment and trucks and a European leader in truck-mounted drive and control systems.

The takeover of the German company followed its $410M cash purchase of smaller US sector rival Hudson Products for its range of air-cooled heat exchangers and axial flow cooling fans for the refining, petrochemical and natural gas markets.

Then in September 2018, Chart agreed to acquire Italian company VRV S.p.a., an engineer and designer of cryogenic equipment whose offerings also complement Chart’s products.

The Harsco group has said that the proceeds from selling its Harsco AXC gas compression subsidiary would be used to pay debts and provide the parent company with additional financial flexibility to its transformation into an environmental solutions operator.