Cool Company LNG freight consolidation dropped: Update

Updates with details of Golar's revised spin-off completion date in paragraph five

Three LNG shipowners have abandoned an attempt to consolidate their respective fleets into a 16-vessel fleet called the Cool Company, one of the participants — Norway's Awilco — said today.

The firm has been in negotiations with fellow Norwegian owner Golar and Greece-based TMS Cardiff Gas over a consolidated fleet since 2018.

But the firms have agreed to discontinue these negotiations, Awilco said, without providing a reason for the breakdown.

Golar had also been part of the Cool Pool joint venture, with shipowner Gaslog, which pulled out following Golar's decision to spin off its LNG carrier business.

Golar is seeking to complete the spin-off next year, having postponed this from the end of 2019, and will directly own 14 LNG carriers following the sale of the 140,000m³ Golar Arctic as a floating storage and regasification unit, it said.

But an expected weaker LNG freight market from 2021 may create the potential for other consolidations, such as mergers and acquisitions, Gaslog said earlier this month. The market has historically avoided such movements, but new market entrants have differing funding structures to previous entrants.

Awilco has only two vessels — the equally sized 156,000m³ WilForce and WilPride — both of which are under term charters from Bermuda-based owner Teekay LNG Partners. The charter agreements contain mandatory purchase components, with Awilco set to purchase the vessels in February 2020, Teekay said this month.

By Samuel Good