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Assessing GasLog Partners' 3Q16: What Does the Future Hold?

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Part 2
Assessing GasLog Partners' 3Q16: What Does the Future Hold? PART 2 OF 8

GLOP’s New Liquefied Natural Gas Volumes Benefit the Industry

Insights

In its 3Q16 earnings, GasLog Partners (GLOP) gave insights into the LNG (liquefied natural gas) market’s outlook. The LNG market will directly affect GasLog Partners and its peers Golar LNG (GLNG), GasLog (GLOG), Dynagas LNG (DLNG), Golar LNG Partners (GMLP), and Höegh LNG Partners (HMLP).

GLOP&#8217;s New Liquefied Natural Gas Volumes Benefit the Industry

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GasLog Partners’ demand outlook for LNG carriers with long-term charters remains positive. According to the company, new LNG volumes will create demand for additional ships over and above those available in the market today.

A few positive announcements in 3Q16 were as follows:

  • Cheniere Energy announced the substantial completion of Sabine Pass Train 2 with a production capacity of 4.5 Mtpa (million tons per annum), and cargoes from this facility are now being transported.
  • Angola LNG’s 5.2 Mtpa facility and the Chevron-operated 15.6 Mtpa Gorgan project restarted production.
  • The Canadian government gave conditional approval for Pacific NorthWest LNG’s 12 Mtpa project.
  • BP announced its final investment decision on the Tangguh Expansion Project, which would add 3.8 Mtpa of capacity to the existing facility.
  • Pakistan purchased its second floating storage regasification unit. The country is expected to continue increase its LNG imports.
  • Bangladesh announced its agreement for the construction and operation of its first LNG import terminal.

LNG import volumes

According to GLOP, year-to-date LNG import volumes in China and India have risen 27% and 34%, respectively, as both countries have taken advantage of attractive LNG prices. In 3Q16, LNG prices in northeast Asia and northwest Europe rose 16% and 15%, respectively. This made the LNG price arbitrage for US exports more attractive.

According to GLOP, it’s too early to predict a sustained recovery, but it believes that fundamentals continue to point to a recovery in 2017 and beyond.

Investors interested in broad exposure to industrials stocks can invest in the SPDR Dow Jones Industrial Average ETF (DIA).

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