Golar Grand drops down

Golar LNG Partners (GMLP) is set to acquire an LNG carrier from fellow John Fredriksen company Golar LNG for $265m.

The MLP spin-off is set to acquire the 145,700-cbm Golar Grand (built 2006) and its three year charter to BG Group.

The charter has an initial term that expires in March 2015 and BG Group has the option to extend the charter term for an additional three years.

In the event that this option is not exercised, Golar LNG has agreed to charter the vessel from GMLP until October 2017.

To fund the acquisition GMLP plans to offer 4.3m shares in a public offering with Morgan Stanley acting as the sole bookrunner for the deal.

In addition Golar LNG has agreed to purchase $46.5m of common units directly from GMLP in a private placement.

If the acquisition does not proceed GMLP says it will use the proceeds from the fund raiser for general partnership purposes.

The acquisition is expected to generate annual revenues of between $42m and $44m for GMLP during the term of the charter to BG Group.

GMLP expects the acquisition to add between 9 and 11 US cents to its annual dividend, which currently stands at 45 US cents per quarter.

Golar Wilhelmsen will continue to manage the operation of the Golar Grand pursuant to an existing ship management agreement.

This is GMLP’s third acquisition since its IPO in April 2011 and follows the purchase of the FSRU Nusantra Regas Satu  (built 1977) and the FSRU Golar Freeze (built 1977).

On Thursday Golar LNG announced that it has reached agreement for the development of its first floating liquefied natural gas vessel (FLNGV).

It said it has teamed up with Keppel in a move that could see three of its ships converted into floating LNG production vessels.