Korean Shipping Firms Unite as LNG Giants
South Korean shipping companies SK Shipping Co. and H-Line Shipping Co., both owned by private equity firm Hahn & Co., are swapping tankers and contracts to create a liquefied natural gas (LNG) giant.
The deal will turn SK into the world's third-largest operator of LNG carriers, while H-Line will become a leading tanker and bulk-shipping company in the region.
SK Shipping will receive 16 LNG vessels and their long-term contracts from H-Line in exchange for 12 tankers, their contracts and approximately $300 million in cash.
The swap is part of a years-long effort to reshape Korean shipping, which has been impacted by months of conflict in the Persian Gulf upending the energy trade and creating lucrative opportunities for shipowners, charterers, and traders.
Consolidating their fleets will allow both companies to benefit from predictable cash flows in an industry otherwise buffeted by sharp swings in freight rates.