Vopak Looks to Buy into Exmar's FSRU Business

Dutch oil terminals operator Vopak and Belgian shipowner Exmar announced September 2 that they are in talks to explore the possibility of an acquisition of Exmar's share in its floating LNG storage and regasification units (FSRU) business by Vopak. 

"As the outcome of these discussions between Vopak and Exmar is currently unknown, no further details are disclosed," their joint statement said. "Material updates will be communicated via press releases."

Vopak said it considers FSRUs as a way to serve its existing customers, who require ready-to-go solutions to access growing LNG import markets.

It already counts LNG as one of its strategic focus areas and jointly owns and operates two land-based LNG terminals: Gate at Rotterdam (with Gasunie), and the TLA terminal in Altamira (with Spain's Enagas) in eastern Mexico.

Exmar, active in LNG shipping for over 35 years, is currently co-owner and or operator of ten FSRUs, and has one FSRU and one floating liquefaction (FLNG) facility under construction. Exmar is actively developing business opportunities for long-term employment of these two units under construction.

Caribbean FLNG, whilst under construction (Photo credit: Exmar)

The 0.5mn metric ton/yr FLNG facility, dubbed Caribbean FLNG, was due to have been installed in Colombia, but the charter was terminated in March 2016 by Canadian firm Pacific Exploration and Production, which said the economics for small-scale liquefaction in that country had deteriorated. Exmar said a settlement agreement stipulates a termination fee payable by PEP to Exmar in monthly installments until June 2017. 

On July 28, Exmar reported preliminary overall post-tax 1H 2016 net profits were $16.9mn, compared to $21.8mn in first half 2015. It also said that commissioning of Caribbean FLNG began June 14 2016 and that it expected to take delivery of the FLNG vessel in 3Q 2016 once performance-tested at the shipyard. "Several employment opportunities for the unit are currently under active discussions," it added.

Update: Exmar's definitive 1H 2016 results on September 2 instead reported a net profit of $31.4mn, compared to a net 1H 2015 profit of $21.8mn. They also said that "a termination fee was agreed with PEP for the cancellation of the Caribbean FLNG tolling agreement, however, under the restructuring procedure of PEP, the court has ordered a suspension of the outstanding $11mn."

Shipowners like Exmar have suffered low charter rates for LNG carriers, and a decline of interest in their floating liquefaction business. Earlier this year Norway-based Hoegh LNG decided to shelve investment in FLNG activities, and focus on existing FSRUs and LNG carriers instead.

Mark Smedley