SK Shipping aims to become Asia’s largest operator of liquefied natural gas (LNG) carriers by acquiring vessels and contracts from H-Line Shipping in a deal announced by Hahn & Co.
Hahn & Co is a South Korean private equity firm, which owns both companies. It confirmed that SK Shipping will receive 16 LNG carriers and related long-term contracts from H-Line Shipping.
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In exchange, SK Shipping will transfer 12 oil tankers, long-term contracts, and approximately $300m in cash to H-Line Shipping.
Upon completion of the transaction, SK Shipping is expected to operate a fleet of 32 LNG carriers and 14 liquefied petroleum gas (LPG) vessels.
This move will place SK Shipping among the world’s three largest LNG carrier operators, according to Hahn & Co.
SK Shipping will also rebrand as K-LNG to reflect its focus on LNG and LPG shipping. The transaction is subject to approval from customers and lenders.
Following the asset swap, H-Line Shipping will shift its operations to focus on tanker and bulk shipping, adding oil tankers to its existing dry bulk and vehicle carrier businesses.
The 12 tankers acquired by H-Line Shipping are linked to long-term transportation contracts, which Hahn & Co. said will provide a stable revenue stream.
The newly expanded operations are expected to strengthen H-Line Shipping’s role in transporting crude oil and other commodities for Korean firms.
Hahn & Co. stated that the restructuring is intended to improve scale and operating efficiencies at both companies.
The firm noted that global demand for LNG shipping may rise, with energy companies such as Shell projecting growth in LNG demand through to 2040.
The asset swap will give SK Shipping a presence valued at about Won11tn ($7.8bn), while H-Line’s assets will total around Won5tn after the transaction.
Both shipping firms have previously transitioned away from volatile spot freight markets toward long-term contracts under Hahn & Co.’s ownership.
Hahn & Co. acquired a controlling stake in SK Shipping in 2018 and created H-Line Shipping in 2014 after purchasing Hanjin Shipping’s bulk shipping business.
