LNG carrier fleet builder Arntzen quits CEO post at troubled US shipping group OSG

Tuesday, 12 February 2013

Overseas Shipholding Group, the US shipping company and owner of four LNG carriers and currently in the US bankruptcy protection process, said Morten Arntzen had resigned as President and Chief Executive after nine years in the post.

OSG filed for Chapter 11 bankruptcy protection in November 2012 after being overwhelmed by the global shipping slump.

Arntzen took the helm at OSG in January 2004 and three years later the company began taking delivery of four of the largest LNG carriers ever built, with 25-year contracts to deliver LNG from Qatar, the world's largest LNG producer.

OSG originally invested in its four-vessel LNG fleet, in partnership with Qatari shipping company Nakilat, when cargoes from Qatar were pointing to the US and its growing import terminal network. The UK was also marked down as a principal destination of the OSG-Nakilat ships.

However, the US shale-gas boom and the Fukushima disaster in Japan altered the economics of the US LNG market and deliveries to high-priced East Asian market accelerated.

Unlike many of OSG's other vessels, the four LNG carriers have been a successful investment and been fully employed.

Arntzen also bullt up OSG's presence in crude oil, products and US Flag - nearly doubling its fleet from 53 operating and newbuild vessels to a fleet of more than 100 ships.

OSG's four part-owned vessels comprise three 216,200 cubic metres capacity Q-Flex carriers, the "Al Gattara", the "Al Gharaffa" and the "Al Hamla" and the 266,000 cubic metres capacity Q-Max carrier "Al Mafyar".

OSG entered the LNG transport business just after Arntzen's arrival and the four ships were delivered between 2007 and 2008.

"The LNG business right now is the fastest growing segment in the shipping industry," Arntzen said at the time.

In announcing Arntzen's departure, OSG said it appointed Robert Johnston to both posts effective immediately.

Johnston has been the Senior Vice President and Head of US Flag Strategic Business Unit.

"The board thanks Morten Arntzen for his service, including during recent challenging times," said Michael J. Zimmerman, Chairman of the board of OSG.

"The board is pleased that Bob Johnston is available to lead the company through the next stages of its Chapter 11 reorganization," Zimmerman added.

OSG filed Chapter 11 petitions for itself and certain operating subsidiaries in the US bankruptcy court in the state of Delaware.

The company intends to use the Chapter 11 process to "significantly reduce its debt profile, reorganize other financial obligations and create a strong financial foundation" for the company's future.

Certain subsidiaries, including those that manage the company's facilities in Manila, Singapore, Greece, London and Newcastle, have not filed for Chapter 11 reorganization.