BW LPG India cashes in on ageing VLGC

BW LPG, a prominent owner of Very Large Gas Carriers (VLGCs), has announced the sale of its older vessel, the BW Lord, as part of its strategic fleet renewal initiative. The transaction, executed through its Indian subsidiary, is expected to yield significant financial benefits, including a net gain of approximately $25 million. This sale reflects the company’s ongoing efforts to modernize its fleet amid favorable market conditions.

Strategic Sale of BW Lord

The BW Lord, a vessel built in 2008, will soon be sold to a new owner in a deal that is projected to generate around $61 million in net cash proceeds. The delivery of the ship is scheduled before the end of 2025, allowing BW LPG India to continue earning income from the vessel until it is handed over. This move is part of a broader strategy aimed at updating the company’s fleet while leveraging advantageous second-hand market prices.

BW LPG India, a joint venture established in 2017 between BW LPG and Global United Shipping, operates a fleet of eight very large gas carriers. Collectively, these vessels are responsible for approximately 20% of India’s LPG imports. The recent sale follows the company’s earlier acquisitions of two vessels, the BW Chinook and BW Pampero, both built in 2015. BW LPG’s CEO, Kristian Sørensen, emphasized the importance of these transactions in maximizing asset value and enhancing the agility of their commercial platform in the current market environment.

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Future Prospects for BW LPG India

The sale of BW Lord reflects BW LPG India’s commitment to maintaining a competitive and modern fleet. The evolving landscape of the LPG market necessitates such strategic decisions to ensure operational efficiency and profitability. With the recent acquisitions and the impending sale, BW LPG is poised to enhance its market position in the dynamic shipping industry.

Since Maas Capital Shipping acquired a 42% stake in BW LPG India in 2021, the subsidiary has been navigating the market’s challenges while focusing on fleet optimization. The company’s proactive approach underscores its dedication to adapting to market conditions and capitalizing on opportunities for growth. As BW LPG India continues to evolve, stakeholders will be keenly observing how these strategic moves shape its future in the LPG sector.