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Korea Lines to spin off LNG shipping business

  • Mercados: Coal, Natural gas
  • 05/03/20

South Korean shipping firm Korea Lines has decided to spin off its LNG transportation business into a separate company.

The firm's 11 LNG carriers — all under charter with South Korean state-owned Kogas — will now operate under Daehan Shipping LNG, using an English name of Korea Line LNG. Korea Lines' remaining 23 bulk carriers, three tankers and single ferry will remain under the original entity.

Four of the firm's LNG carriers are owned as part of a consortium.

Korea Lines will divide the company on 1 May — pending approval by its shareholders — in an attempt to make its LNG carrier and bulk transport businesses more efficient, the firm said. This will allow them to react to developments in their respective markets independently, Korea Lines noted, adding that it does not intend to relist the new LNG entity on the country's securities exchange, or seek new equity holders for it.

The South Korean firm is the second LNG shipowner to decide to spin off its carrier business from other segments. Bermuda-based owner Golar LNG announced that it would separate its LNG carrier business from its power generation unit last year, but delayed the execution of this plan to this year.

But Golar has maintained an LNG shipping portfolio with greater spot exposure than Korea Lines and is seeking partners for a potential merger of its carrier arm with other LNG shipowners.


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