From gCaptain, June 28:
NEW YORK — Infrastructure funds are increasingly financing expensive, purpose-built ships serving the offshore energy market, according to investment bankers speaking at Marine Money’s 36th annual conference.
This trend is due to bankers recently making a compelling case that these niche-market vessels share many characteristics of traditional infrastructure investments, said members of a panel entitled “Infrastructure Funds and Maritime Finance – The Love Affair Continues”. Arguably, the most compelling feature these vessels share is operating under long-term time charters, panelists said.
“It is a widening of the (infrastructure fund) lens,” said Loli Wu, managing director, co-head of North America Infrastructure Investment Banking, Bank of America in New York. The funds have become “a good source of capital for a certain type of asset,” he said.
Infrastructure funds underwrite the construction of expensive ships that store and process crude oil collected from offshore rigs, and others that re-gasify, or reheat, super-cooled Liquid Natural Gas, making that fuel readily available for commercial use. The charterer is often a marine terminal that receives the inbound cargo and subsequently transfers it downstream to an oil major or utility.
The defining characteristic of these purpose-built “midstream” vessels is that they are usually dedicated to a specific project and work under long-term charter contracts, speakers said. The goal is “to make it look like infrastructure,” said Denny Sreckovic, a partner at Global Infrastructure Partners, based in New York. The firm finances the construction of the ships that it owns....
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