A subsidiary of GasLog Ltd entered into a decade-long time charter agreement with Sinolam LNG Terminal, SA. The agreement includes the delivery of a floating storage unit (FSU) for liquified natural gas (LNG). This FSU will service a power project in Panama.
First, the GasLog Singapore LNG vessel will be converted into the FSU. Further, the vessel will also serve as an LNG carrier following the full conversion. The carrier’s five-year special survey, planned for 2020, will coincide with the conversion process, saving time by utilizing a single dry dock. The completed FSU is expected to be delivered to Panama in late 2020.
The FSU will serve a gas-fueled power facility near Colón, Panama, operated by Sinolam Smarter Energy LNG Power Company. Sinolam has already signed long-term agreement with local utilities and Royal Dutch Shell plc.
The CEO of Sinolam Smarter Energy, Kenneth Zhang stated, “The LNG Floating Storage Unit is a key element of our integrated power project, and we are very pleased to welcome GasLog as a strategic partner for our commercial operations. GasLog’s entry into the project is a vote of confidence in our business platform and the attractiveness of Panama as an investment opportunity.”
GasLog’s CEO, Paul Wogan noted the financial stability the long-term agreement will provide and highlighted the benefits of switching to cleaner fuels, like LNG.
Once operational, the FSU will have complete utilization for the contract duration. This combined with lower operating costs, the vessel is expected to provide $20 million of EBITDA per year for the next decade.
