- Navigator Gas and Enterprise Products Partners L.P. completed the ethylene export terminal expansion at Morgan’s Point, Houston.
- Navigator Gas will acquire three German-built handysize ethylene carriers for $83.9 million.
- The expanded fleet and terminal capacity aim to meet the growing global demand for U.S. ethane and ethylene.
- The investments in terminal expansion and vessel acquisitions are projected to boost earnings starting in 2025.
- CEO Mads Peter Zacho highlights the expected growth in demand for U.S. ethane and ethylene.
Navigator Gas Expands Terminal and Acquires Ethylene Carriers
Navigator Holdings Ltd. (described herein as “Navigator Gas” or the “Company”) (NYSE: NVGS), the owner and operator of the world’s largest fleet of handysize liquefied gas carriers, announces the completion of the expansion of its existing ethylene export terminal joint venture owned 50/50 by Navigator and Enterprise Products Partners L.P. at Morgan’s Point, Houston (the “Export Terminal Joint Venture”), previously announced on November 15, 2022, with additional information on March 9, 2023 (the “Expansion Project”). Navigator Gas further announces an agreement to acquire three handysize ethylene carriers for a total purchase price of US$ 83.9 million, complementing the increased export capacity from the Export Terminal Joint Venture.
Joint Venture Expansion Enhances Export Terminal Capabilities
In line with previous guidance, the Expansion Project was completed on time in late December 2024 and within budget. Going forward, the flex train is expected to increase ethylene export capacity at Morgan’s Point by at least 550,000 tons to 1.55 million tons per year starting in 2025, and potentially up to a total of 3.2 million tons per year in the coming years. Further, the Expansion Project is anticipated to triple the current instantaneous ethylene refrigeration capacity at Morgan’s Point from 125 tons per hour to 375 tons per hour, providing increased flexibility for customers and the potential to add additional capacity based on demand. The expanded capacity will utilize the Export Terminal Joint Venture’s existing 30,000-ton refrigerated tank which will continue to facilitate loading vessels at Morgan’s Point at 1,000 tons per hour. Additionally, the Joint Venture has signed an increased and extended offtake agreement with its largest off-taker with the additional volumes starting in the first quarter of 2025.
Expansion of Fleet with Three Handysize Ethylene Carriers
To further support the Expansion Project by increasing Navigator Gas’ fleet of ethylene-capable vessels, the Company has also entered into agreements with an unrelated third party (together, the “Transaction”) to acquire three German-built 17,000 cubic meter capacity vessels.
The vessels under the Transaction are expected to be delivered between February and May 2025 at the latest. Upon delivery or soon after, they are anticipated to operate in the spot market. The Company does not intend to issue any new capital but plans to finance the acquisitions with a combination of cash on hand and new debt.
The Transaction is subject to customary closing conditions and following its completion, Navigator Gas will own and operate a fleet of 59 vessels, 28 of which will be ethylene and ethane capable.
Mads Peter Zacho, CEO of Navigator Gas comments:
“Future demand for competitively priced US ethane and ethylene is likely to continue its upward trajectory in the coming years. The ethylene export terminal expansion, and the addition of three handysize ethylene carriers to our fleet, provide us with key capabilities and infrastructure to meet that growing demand. With the most recent offtake agreement set to boost throughput in the near term and the additional vessels, we expect our investments to be accretive to earnings in 2025 and beyond.”
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe
Source: Navigatorgas
