Master limited partnerships (MLPs) have grown steadily, according to speakers at recent conferences and web presentations hosted by New York shipping specialists Capital Link.
A number of funds packagers have combined baskets of MLPs into either “closed end funds” or “exchange traded funds.” Increasingly, shipping entities have been structured as MLPs (if they are transporting oil or LNG) or as partnerships that mimic the MLP structures where excess cash flows directly through to partners — offering hefty yields at a time of generally low interest rates.
Bankers are now marketing a fourth listing in the LNG shipping space. Last week, a newly formed entity linked to GasLog (a company founded by the famed Livanos family) issued a prospectus for a partnership that would run three ships, initially, all on term charters to BG, one of the leading shippers of LNG.
Bankers have said that investors are increasingly seeing shipping as a way to play the U.S. energy renaissance. Among shipping equities, gas (both LNG and LPG) are “hot” sectors.
Recently, maritime analysts were contemplating the implications of an announcement by Enterprise Products Partners that it would be building an ethane export facility at a complex at Mont Belvieu, Texas. According to the company, “We estimate U.S. ethane production capacity currently exceeds U.S. demand by 300 MBPD and could exceed demand by up to 700 MBPD by 2020.” The new facility is slated to come on-stream in Q3 2016.
Analysts look favorably at Navigator Gas (a corporation, rather than a partnership, taken public by the famed investor Wilbur Ross), which is thought to have one of the best fleets capable handling lots of sizes of ethane shipments, in the 20,000 m3 – 25,000 m3 category. Further trade flows increase the work for all manner of support, including ship assist in the steadily more crowded waterways of the U.S. Gulf coast.