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Capital Product Partners targets LNG acquiring 11 newbuilds for $3.1 billion

Photo: AdobeStock LNG pipes leading to LNG-carrier
Nasdaq-listed Capital Product Partners is shifting focus to LNG carriers with a $3.1 billion foray into the sector, while planning to exit containers.

Capital Product Partners has entered in agreement with Capital Maritime & Trading Corp and Capital GP to acquire 11 newbuild LNG carriers from Capital Maritime for a total price of $3.1 billion.

According to the agreement, the vessels will be purchased through the acquisition of 100% of the equity interests in the applicable vessel-owning company. The vessels purchased by Capital Product Partners are two-stroke MEGA Mark III Flex 174,000 cu metre- LNG carriers built or under construction at Hyundai Heavy Industries and Hyundai Samho Heavy Industries in South Korea.

One vessel LNG carrier Amore Mio 1 was recently delivered, the remaining 10 vessels are scheduled to join company’s fleet between January 2024 and March 2027. Meanwhile Capital Product Partners is looking to exit the container sector and exploring plans to sell it boxships, with no plans to acquire further containerships.

Additionally, Capital Product Carriers agreed to change its name to Capital New Energy Carriers  to reflect its focus on LNG carriers and energy transition shipping. The change is expected to become effective by 31 December 2023.

The change of the business focus to concentrate on the LNG carrier market will also include right of first refusal on two ammonia carriers and two liquid CO2 carriers on order by Capital Maritime, as well as on future two-stroke LNG vessels and charters from Capital Maritime.

 “We are very pleased to announce this transformative transaction for the Partnership, which we expect to usher Capital Product Partners L.P. to a new chapter in its life as a public listed entity. Upon completion of the 11 LNG/C fleet acquisition, we expect CPLP to transform, into one of the largest US listed shipping companies in terms of enterprise value and the largest owner of two stroke, latest generation LNG carriers compared to the current fleet of its US listed peers,” said Jerry Kalogiratos, CEO of Capital Product Partners.

“The commitment to change the name of the Partnership to ‘Capital New Energy Carriers L.P.’ and to gradually divest our container vessels, reflects our renewed business focus on LNG and energy transition shipping.”

“We are well positioned to take advantage of the strong fundamentals of the LNG industry with six open LNG/Cs delivering between 2026-2027 and rights of first refusal on a unique fleet of LCO2 and ammonia carriers. We believe that this transaction, together with our stated intention to convert the Partnership into a corporation and to review over time our capital allocation policy, should attract additional investor interest and allow our equity valuation to move closer to our peers.”

CPLP currently owns 22 vessels, including seven LNG carriers, twelve Neo-Panamax container vessels, and three Panamax container vessels.