Capital Product Partners L.P. (the “Partnership”, “CPLP” or “we” /
“us”) (NASDAQ: CPLP), an international owner of ocean-going
vessels, today announces an important strategic investment in 10
latest technology gas carriers.
Highlights of the
transaction
-
Investment in 10 new gas carriers (the “Gas Fleet”) for USD 756.0
million with expected deliveries between the first quarter of 2026
and the third quarter of 2027
-
Six vessels are Dual Fuel Medium Gas Carriers (“MGCs”) and four are
Liquid CO2 Handy Multi Gas Carriers (“LCO2s”)
-
Key strategic expansion with an eye to the energy transition,
adding complementary gas capability to core Liquefied Natural Gas
(“LNG”) competence and including pioneering vessels in the
transportation of LCO2 and ammonia
-
Transaction expected to be funded using cash at hand obtained
primarily from the sales of container vessels and debt
financing
Mr. Jerry Kalogiratos, Chief Executive Officer
of our General Partner, said: “I am delighted to see the
Partnership taking a significant step in becoming a diversified gas
transportation company with a focus on the energy transition. The
addition of these 10 state of the art, high specification vessels
will allow us to provide our existing customers such as utilities,
energy companies and traders with a full range of vessels for all
their gas transportation needs, increasing our footprint and reach
in the market. While LNG will remain our core competence, with an
expected delivered fleet of 18 latest generation LNG carriers by
2027, this transaction puts a strong emphasis on the energy
transition, as these new acquisitions will have the capability to
move Liquefied Petroleum Gas (“LPG”), ammonia, butane, propylene
and liquid CO2. The ship building berths secured are valuable early
slots within a very tight ship building market and at highly
reputable shipyards for these types of vessels. This strategic
investment not only strengthens our market position, but also
aligns us with the future of energy transportation, ensuring we
remain at the forefront of the industry.”
Transaction details
The Partnership today announces a further
continuation of its expansion into the gas sector through the
acquisition of six MGCs and four LCO2s, with expected deliveries
from the first quarter of 2026 to the third quarter of 2027. This
is a unique opportunity undertaken by CPLP to increase its
footprint into the conventional gas and energy transition gas
sectors, whilst retaining the core focus on LNG.
Summary table of 10 vessels under construction being
acquired in the transaction
Vessel |
Shipyard |
Size(cbm) |
Acquisition/Contract
Price(in US$
millions)1 |
ExpectedDelivery |
HMD MGC 1 |
Hyundai Mipo Dockyard Co. Ltd, SouthKorea (“Hyundai Mipo”) |
45,000 |
78.1 |
Jun-26 |
HMD MGC 2 |
Hyundai Mipo |
45,000 |
78.1 |
Sep-26 |
HMD MGC 3 |
Hyundai Mipo |
45,000 |
78.1 |
Feb-27 |
HMD MGC 4 |
Hyundai Mipo |
45,000 |
78.1 |
May-27 |
CIMC MGC 1 |
Nantong CIMC Sinopacific Offshore &Engineering Co. Ltd, China
(“CIMC SOE”) |
40,000 |
65.3 |
Mar-27 |
CIMC MGC 2 |
CIMC SOE |
40,000 |
65.3 |
Jul-27 |
HMD LCO2 1 |
Hyundai Mipo |
22,000 |
78.2 |
Jan-26 |
HMD LCO2 2 |
Hyundai Mipo |
22,000 |
78.2 |
Apr-26 |
HMD LCO2 3 |
Hyundai Mipo |
22,000 |
78.2 |
Sep-26 |
HMD LCO2 4 |
Hyundai Mipo |
22,000 |
78.2 |
Nov-26 |
TOTAL |
|
|
756.0 |
|
Despite a ship building market which remains
very tight in terms of new vessel slot availability, the
Partnership has secured these valuable early slots at highly
experienced shipyards for these types of vessels. The delivery
schedule is attractive with demand fundamentals for the LPG,
ammonia and the carbon capture, utilisation and storage (‘CCUS’)
business expected to be very strong going forward.
The MGC vessels to be acquired are in line with
our strategy of acquiring high specification, versatile vessels,
which can offer our charterers reduced unit freight cost. They are
among a new generation of MGCs that are dual fuel (can burn both
LPG and Fuel Oil) and have shaft generators, as well as other
energy saving devices, while they offer increased capacity of
15%-30% compared to older generation MGCs. The combination of
higher capacity, energy savings and cheaper fuel (LPG) offers very
attractive unit freight cost economics, which we expect to command
a significant premium compared to their older counterparts,
reflecting substantial advancements in both design and
technology.
The LCO2s are unique vessels that we believe
will place CPLP at the forefront of energy transition shipping, as
they represent ground-breaking technology in maritime transport.
These vessels offer unparalleled trading flexibility, as they are
capable of transporting liquid CO2, LPG, and ammonia. Featuring a
low-pressure system, they ensure the lowest unit freight cost and
are being constructed at high operational specifications, including
but not limited to, multiple cargo systems, reinforced cargo tanks,
bow and stern thrusters and ice class capabilities. Furthermore,
they are alternative-marine-power-ready and with options for
ammonia propulsion and/or onboard carbon capture, thus potentially
significantly reducing carbon emissions. With the capacity to move
more than 1 million tonnes2 of liquid CO2 annually, these vessels
are expected to be the workhorses of the ammonia and liquid CO2
industries.
By acquiring these vessels, CPLP is rapidly
redeploying the gross proceeds, after debt repayment, from the sale
of seven container vessels sold from February 2024 to May 2024,
amounting to a total of $182.5 million together with other cash at
hand and debt financing. This recycling of capital from older to
new clean technology is aligned with our commitment to increase our
footprint in gas and energy transition shipping.
Preliminary Capex Schedule of CPLP in
USD million, as of May 31, 2024:
2024 |
2025 |
2026 |
2027 |
|
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
LNG/Cs3 |
551.7 |
- |
- |
- |
49.9 |
25.6 |
50.6 |
511.0 |
51.2 |
149.7 |
149.7 |
307.2 |
- |
- |
Gas Fleet |
105.9 |
22.4 |
38.3 |
7.1 |
22.5 |
15.5 |
22.0 |
74.0 |
105.4 |
123.2 |
47.7 |
89.3 |
46.9 |
35.9 |
TOTAL |
657.6 |
22.4 |
38.3 |
7.1 |
72.4 |
41.1 |
72.6 |
585.0 |
156.6 |
272.9 |
197.4 |
396.5 |
46.9 |
35.9 |
Fleet Update
Pursuant to the agreement to acquire 11 LNG/Cs
provided under the Umbrella Agreement entered into on November 13,
2023 (the “Umbrella Agreement”), the Partnership took delivery on
May 31, 2024 of the LNG/C Assos (174,000 cbm, latest generation,
two stroke MEGA LNG/C, built at Hyundai Heavy Industries Co., Ltd).
The vessel commenced her ten-year employment with Tokyo Gas.
The vessel acquisition was financed through the
payment of 10% of the acquisition price on the closing of the
Umbrella Agreement on December 21, 2023, along with a new Japanese
operating lease with call option (“JOLCO”) arranged by BNP Paribas
of $240.0 million and $9.3 million cash at hand. The JOLCO has an
escalating quarterly amortization and a balloon payment of $164.4
million payable at the end of its eight-year term.
About Capital Product Partners
L.P.
Capital Product Partners L.P. (NASDAQ: CPLP), a
Marshall Islands limited partnership, is an international owner of
ocean-going vessels. CPLP currently controls a total of 36 high
specification vessels including vessels in the water and on order.
The fleet in the water comprises 10 latest generation LNG/Cs and
eight Neo-Panamax container vessels. In addition, CPLP has agreed
to acquire eight additional latest generation LNG/Cs to be
delivered between the second quarter of 2024 and the first quarter
of 2027, and six MGCs and four handy LCO2/multi gas carriers to be
delivered between the first quarter of 2026 and the third quarter
of 2027.
For more information about the Partnership,
please visit: www.capitalpplp.com.
Forward-Looking Statements
The statements in this press release that are
not historical facts, including, among other things, the expected
financial performance of CPLP’s business, the transaction to
acquire 10 newbuild gas carriers, the transactions contemplated
pursuant to the Umbrella Agreement, CPLP’s ability to pursue growth
opportunities, CPLP’s expectations or objectives regarding future
distributions, unit repurchases, market, vessel deliveries and
charter rate expectations, and, in particular, the expected effects
of recent vessel acquisitions on the financial condition and
operations of CPLP, including expected capital expenses, and the
container, LNG and gas sectors in general, are forward-looking
statements (as such term is defined in Section 21E of the
Securities Exchange Act of 1934, as amended). These forward-looking
statements involve risks and uncertainties that could cause the
stated or forecasted results to be materially different from those
anticipated. For a discussion of factors that could materially
affect the outcome of forward-looking statements and other risks
and uncertainties, see “Risk Factors” in CPLP’s annual report filed
with the SEC on Form 20-F for the year ended December 31, 2023,
filed on April 23, 2024. Unless required by law, CPLP expressly
disclaims any obligation to update or revise any of these
forward-looking statements, whether because of future events, new
information, a change in its views or expectations, to conform them
to actual results or otherwise. CPLP does not assume any
responsibility for the accuracy and completeness of the
forward-looking statements. You are cautioned not to place undue
reliance on forward-looking statements.
Contact Details:
Capital GP L.L.C.Jerry
KalogiratosCEOTel. +30 (210) 4584 950 E-mail:
j.kalogiratos@capitalpplp.com
Capital GP L.L.C.Nikos
KalapotharakosCFOTel. +30 (210) 4584 950 E-mail:
n.kalapotharakos@capitalmaritime.com
Capital GP L.L.CBrian Gallagher
EVP Investor RelationsTel. +44-(770) 368 4996 E-mail:
b.gallagher@capitalmaritime.com
Investor Relations /
MediaNicolas BornozisCapital Link, Inc. (New York)Tel.
+1-212-661-7566E-mail: cplp@capitallink.comSource: Capital
Product
1 The ship building contracts were initially
entered into by Capital Maritime & Trading Corp. The
acquisition/contract prices to be paid by CPLP correspond to the
actual ship building cost for all vessels except for ‘HMD LCO2’ 1
& ‘HMD LCO2’ 2, which were acquired pursuant to the rights of
first refusal agreed under the Umbrella Agreement dated November
13, 2024. These vessels were ordered in July 2023 and were acquired
by CPLP at the same cost that the last two HMD LCO2 vessels were
contracted for in January 2024. CPLP will reimburse CMTC for a
total amount of $74.7 million representing advances made to the
shipyards by CMTC under certain of the ship building contracts and
a profit of $11.5 million
2 Assuming loading LCO2 in North European port(s) and discharge
in North Sea CO2 storage.
3 LNG/Cs acquisitions under the Umbrella Agreement dated
November 13, 2023.
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