Small-scale LNG vessel business evaluation

Background

• The client is a subsidiary of a Japanese energy trading company with a long history of trading oil & gas, oil products, and new & renewable energy products.

• Drewry was appointed to assist with the intra-company transaction. 

Client Objectives

• To conduct a high-level study of the small-scale LNG shipping market outlook, including demand, supply, earnings and asset values
• To carry out an SPV valuation taking into account the company’s financial statements (balance sheet, cash flow statements and income statements), along with projected earnings and costs
• To carry out charter-free and charter-attached valuations, taking into account projected earnings and costs (capex and opex)
• To prepare a financial model for estimating the RoI from investing in a small-scale LNG vessel

Results Achieved

• In-depth understanding of the small-scale LNG shipping market, focusing on the client’s main trading region
• Detailed assessment of the financial model of a small LNG vessel for its charter-free and charter-attached valuations
• Estimated rate of return from operating a small LNG vessel