Acquires CapeOmega Gas Transportation by Ocean Yield to bolster LNG presence

Ocean Yield, a leading tanker and offshore vessel owner, has made a significant move to bolster its position in the LNG charter sector. The company, in partnership with global investment firm KKR, has jointly acquired CapeOmega Gas Transportation AS.

The transaction adds approximately $120 million to Ocean Yield's adjusted EBITDA backlog, providing a substantial boost to the company's financial standing.

The acquisition of CapeOmega comes at a time when the Norwegian LNG market is experiencing some fluctuations, having recovered from a January low. The charter rates in this market are on the rise, offering promising prospects for the future.

CapeOmega Gas Transportation was previously owned by Partners Group. Ocean Yield's acquisition marks a strategic move, as CapeOmega co-owns 10 LNG carriers operated by Knutsen LNG. Three more LNG vessels from CapeOmega are scheduled for delivery in 2025 and 2026.

All LNG carriers in question are employed on long-term charters to investment-grade rated counterparties such as Shell, Engie, and QatarEnergy. The average contract duration for these charters is nine years, or 16 years including extension options, ensuring a steady income stream for Ocean Yield.

KKR is expected to inject additional equity into Ocean Yield to maintain a robust balance sheet for further growth. Andreas Røde, CEO at Ocean Yield, stated that co-investing with KKR in this transaction provides attractive exposure to modern LNG carriers.

Ocean Yield has also invested in Geogas LNG in May, gaining a 34% indirect economic interest in France LNG Shipping (FLS), a portfolio of 12 LNG carriers on long-term charters to tier-one investment-grade rated European energy companies. FLS is 50/50 owned by NYK and Geogas LNG.

It's worth noting that a significant portion of Norway's natural gas production is exported as LNG, making the country a key player in the global LNG market. However, the market faces potential challenges due to fleet oversupply and changing market dynamics.

The closing of the transaction is expected to occur during the second half of 2025. With this strategic move, Ocean Yield is poised to capitalise on the opportunities in the LNG charter sector, ensuring a strong future for the company.