Greek LNG Project FID Slips Again

GasLog, the Monaco-based and Oslo-listed LNG shipowner, has indicated that the target date for a Final Investment Decision (FID) on a northern Greek LNG import project has slipped a full year from what had been expected.

"The Alexandroupolis floating storage and regasification unit (FSRU) project continues to move forward, with the operation and maintenance agreement nearing finalisation, and negotiations with [Greek gas grid operator] Depa and Bulgarian Energy Holding  regarding equity participation progressing well. FID is expected in late 2018,” said GasLog CEO Paul Wogan February 16 in a results statement. Late 2018 is around nine months later than the date mentioned by GasLog in August 2017 . Indeed in mid-2017 the UK contractor Wood Group, which is involved in the project, said back then it expected an FID of late 2017.  The shipowner, however, had more positive remarks to say about LNG tanker rates this year.

Wogan remarked on how "the 2017-2018 winter saw a significant increase in LNG demand" noting that Chinese demand exceeded expectations as a result of cold weather: "resulting in a significant tightening in the LNG shipping market which led to spot rates reaching multi-year highs." He said rates might abate towards the end of the northern hemisphere winter, but that GasLog remains well positioned to benefit from the anticipated longer term market recovery. GasLog had ordered a newbuild LNG carrier from Samsung that is currently unchartered but expected to deliver into a stronger LNG shipping market in 3Q2019, he added.

Since the start of this year, GasLog delivered its new LNG carrier GasLog Houston January 8 into a short-term time charter agreement with an unnamed major LNG producer, prior to the start of the ship's long-term charter to Shell at end-2018 (until April 2028). Also this year, GasLog amended the charter to Total of the GasLog Hong Kong so that it will now commence on delivery of the vessel in March 2018 and expire in 2025.

GasLog made a profit of $84.2mn in 2017, three times its year before $28.1mn profit. Its 4Q 2017 profit was $29.7mn, versus a profit of $46.4mn in 4Q2016.