1. Which Tanker Company Will Rule
LNG?

2. Investing in LNG Tankers: The Opportunity
In
• 200 million tons of LNG capacity to come online between now and 2020
• Longer Routes (US to Asia) require more tankers for constant delivery volumes

3. Photo Source: NASA
Not All LNG Tankers Are the Same
3 Primary types of tankers:
• Transport tankers
• Categorized by type of product it
can ship (methane, ethane, etc.)
• FSRU: Floating Storage and Regasification Units
• Small scale, low cost method for on-site LNG gasification
• FLNG: Floating LNG Liquefaction Units
• Ideal for offshore production where pipeline infrastructure is
weak

4. Investing in LNG Tankers: The Opportunity
Like LNG liquefaction/regasification facilities, LNG Tankers
work off of long term contracts (charters)
Stable, predictable
cash flows
Well suited for MLP
structure (high
yielding investments)

5. Points of Research for LNG Companies
Photo Source: NASA
1) Contract Coverage
• Look for companies with long-term charters in place
• Do tankers under construction already have a charter?
2) Healthy Utilization Rate (>90%)
3) Since most are Master Limited Partnerships, Distribution Coverage
Ratios
𝑫𝒊𝒔𝒕𝒊𝒃𝒖𝒕𝒂𝒃𝒍𝒆 𝑪𝒂𝒔𝒉 𝑭𝒍𝒐𝒘
𝑫𝒊𝒔𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏𝒔 𝒕𝒐 𝑼𝒏𝒊𝒕𝒔
≥ 𝟏

6. Who Are the Major Players?

7. GasLog
Photo Source: NASAPhoto Credit: Wes Peck via Flickr. com

8. GasLog
Photo Source: NASA
What you Need to Know:
• Young fleet (average age: 2.6 years) of Liquefied Natural Gas carriers
• Contract Coverage for 2014= 100%
• 16 vessels in operation, 9 under construction
• 4 vessels under construction already under contract
• Recent IPO of GasLog Partners to dropdown assets,
• Only LNG Tanker Company that deals exclusively with LNG
transportation

9. Teekay LNG Partners LP
Photo Source: NASA

10. Teekay LNG Partners LP
Photo Source: NASA
What you Need to Know:
• 2nd largest global operator of LNG and LPG tankers
• 100% contract coverage for LNG fleet with average contract duration
of 13 years
• 50/50 Joint Venture for six icebreaker LNG tankers for Russia’s Yamal
LNG Terminal in Siberia (25-27 year contracts)
• Largest Fleet Additions for LPG tankers (11 LPG new-builds/ 5 LNG
new-builds)

11. Golar LNG
Photo Source: NASA
Photo Credit: Wes Peck via Flickr. com

12. Golar LNG
Photo Source: NASA
What you Need to Know:
• Most diversified LNG Tanker offering: Looking to compete in
liquefaction, transport, and regasification
• Converting 3 of its older tankers into FLNG stations for on-site,
remote liquefaction needs
• 17 vessels, 9 under construction (not including conversions)
• Contracts some of its vessels on spot market, causing troubles since
so many others brining on new vessels (utilization rate at 82.6%)
• Expects demand pickup by 2016

13. Navigator Holdings
Photo Source: NASA
Photo Credit: Wes Peck via Flickr. com

14. Navigator Holdings
Photo Source: NASA
What you Need to Know:
• Only player focused exclusively on transport of LPG products, looking
to export LPG and NGL from shale as chemical feedstock
• Only 13% of global gas transportation fleet capable of transporting
ethane & ethylene (45% of Navigator fleet ethylene capable)
• 23 vessels in operation with 13 under construction. Newbuilds
expected to increase EBITDA by over 66%
• Utilization rate of 96.9%

15. What does this all mean to me?
Each LNG Tanker provides a unique investment opportunity:
GasLog: Lower risk pure play on LNG transportation, tied very closely
to success of BG Group and Royal Dutch Shell
Teekay LNG Partners: Diversified mix of LNG and LPG with a bet that
Arctic gas exploration & treansport will be successful
Golar LNG: Highest risk, betting that several new offshore gas fields
(E.Africa, Arctic) will require FLNG and that FSRU’s will be needed in
certain regions that don’t have regasifaction terminals
Navigator Holdings: Bet that US based NGL and LPG will see
significant uptick in production and will replace other chemical
feedstocks worldwide via exports
Photo Source: NASA

16. How You Can Profit from
America’s Energy Tax
“Loophole”…