GasLog Partners LP

Thank you, Joe. In a year which will be defined by the COVID-19 pandemic, I’m proud to say that GasLog’s business has proven to be resilient.

Before management takes you through GasLog’s third quarter and as we near the final weeks of 2020, I wanted to take a moment and reflect on what we’ve achieved this year and provide my perspective on where GasLog is heading in 2021 and beyond. With the delivery of the GasLog Georgetown next week, we will have brought four modern newbuild XDS carriers into the GasLog fleet during 2020, all of which were on time, on budget and fixed on multiyear charters with leading counterparties.

In addition to the revenue and cash flow visibility these investors will provide, their efficiency and improved emissions profiles will significantly reduce our fleet’s carbon footprint. Our fleet rationalization is not limited to the addition of newbuilds, it’s our intention to sell or redeploy our one remaining steam vessel for the next couple of years.

At GasLog, we continue to refine on our sustainability ambitions, and are currently investigating technologies that can be adopted on our existing fleet to further reduce our greenhouse gas emissions. By the end of the third quarter of 2021, we will have taken delivery of our remaining three newbuilds, bringing GasLog Limited’s wholly-owned fleet to 20 carriers, which will include 12 latest generation XDF vessels.

Our fleet will be among the largest, most modern and environmentally efficient in the world. In addition, our current long-term charter backlog will contribute approximately $375 million of committed annual revenue for many years to come.

This year, we also consolidated all our senior management into GasLog’s office in Paris, Greece, which significantly streamlined our decision-making and reduced overhead expenses by $9 million. It’s my view that this leaner, more nimble organization will help us meet the challenging demands of the growing industry.

Looking forward, we will continue to focus on our cost base. We expect to further reduce our overhead costs by an additional $4.5 million next year.

And over the next three years, to see our operating cost decline by $20 million. These measures, along with our debt reduction, will improve the commercial competitiveness of our fleet and add to our free cash flow capacity.

Combination of a modern, efficient and high-quality fleet, nearly $3 billion revenue backlog and the management team focused on driving down costs, will provide GasLog with significant free cash flow over the coming years. This will allow us to reduce leverage and to reward our shareholders.

Though a reinstatement of our common dividend back to pre-COVID levels as well as opportunistic special dividends as the LNG freight market recovers. The winter period ahead looks promising, with recent industry fixtures well in excess of 100,000 per day.

Finally, I can confidently say that LNG’s best days and, by extension, GasLog are ahead of it. Despite previously unimaginable headwinds, LNG growth has continued unabated this year, is projected to do so for decades to come.

As a primary replacement for dirtier hydrocarbons, such as coal and oil products, as a partner with renewables, such as wind and solar for times when wind isn’t flowing or sun isn’t shining, or as a fundamental building block for hydrogen production. Natural gas and LNG remain integral to the world’s transitioning energy needs and will continue to do so for many years.

I will now hand over to Paul to take you through an update of the LNG commodity and shipping markets. Thank you.

Thank you, Mr. Livanos.

On Slide 7, Poten reported 111 spot fixtures in the third quarter, taking the 2020 nine-month total to 288, already higher than the annual figure for any previous year. The increased spot market liquidity has been underpinned by the increasing volume of spot LNG, the growing participation of traders and resilient LNG demand.

And we’ve taken advantage of this increased spot market liquidity to minimize idle time between voyages, capturing 70% of the average headline spot rate through to the end of the third quarter. This high utilization means the average earnings of our variable rate, TFDE fleet, for the first nine months of the year, are similar to 2019, despite a nearly 30% decline in the average headline spot rate.

The chart on the right shows how headline spot rates have risen sharply recently as buyers have looked to secure LNG supplies ahead of the Northern Hemisphere winter. Our focus remains on maximizing the utilization of our vessels.

And so we aim to use this period of market strength to fix our open vessels on time charters wherever possible. Slide 8 shows the LNG demand during the first 10 months of the year.

Demand declined during the Northern Hemisphere summer, with China and India being the notable exceptions. However, since August, demand has begun to recover quite strongly, driving a recovery in the LNG spot shipping rates.

For the full year, Wood Mackenzie forecast LNG demand to grow by 2%, implying further demand growth in November and December. This growth is certainly being aided by China, who will continue to build out and deregulate the downstream infrastructure and where a reported 7 million households were converted to gas from coal in October.

Slide 9 shows that Wood Mac expects LNG demand to grow by 89 million tonnes between 2021 and 2026, or 4% per annum. Nearly 80% of this growth comes from outside China, demonstrating LNG’s broad-based appeal and versatility in meeting the world’s energy needs.

Slide 10 focuses on LNG as a marine fuel, a new and rapidly growing market. The left-hand chart demonstrates that LNG is the cleanest marine fuel available today.

Compared to heavy fuel oil, it produces no particulate matter, over 80% less nox, 99% less sox and 21% less CO2, whilst now also being the most affordable marine fuel. These benefits are expected to drive LNG’s rapid adoption in a market which Wood Mackenzie forecast to grow over 20% per year through 2040.

Slide 11 shows monthly U.S. exports during 2020.

U.S. exports are the most shipping intensive as the distance to most major discharge destination is above the global average.

For example, during the third quarter, approximately 2.5 ships were needed for every 1 million tonnes of LNG exported, nearly twice the global average. Therefore, as U.S.

exports recover to their pre-COVID levels, it is strongly positive for shipping demand. Slide 12 outlines the scale of the infrastructure currently under construction to both produced and consumed LNG.

The figures for regasification capacity only go up to 2020, as these import terminals can be built much more quickly than production facilities. There are, however, many more planned additions for both production and regasification, and we expect these numbers to continue to increase.

There’s presently 104 million tonnes per annum of LNG production under construction, half of which is in North America. And on the right, you’ll note there’s 126 million tonnes per annum of regasification capacity being built to date, two-thirds of which is in Asia.

We, therefore, believe that this new production will be shipping intensive, a positive for our business. In summary, despite the huge disruptions brought on by the COVID pandemic, demand for LNG, in stark contrast to other hydrocarbons, is expected to grow this year.

This demonstrates LNG’s resilience and importance as an energy source and gives us confidence that LNG will remain integral to the world’s transitioning energy needs for many years to come. Now turning to Slide 14, and a review of GasLog’s third quarter and outlook.

Since we last reported in early August, GasLog has taken delivery of the GasLog Westminster, with the GasLog Georgetown due to deliver later this month. We’ve enhanced our liquidity and accessed a new pool of capital through the sale and leaseback of the GasLog Hong Kong to a leading Chinese lessor.

And despite the ongoing challenges and uncertainties caused by the COVID 19 pandemic, we continue to deliver safe and robust operational performance with close to 100% uptime for our fleet, not undergoing dry docking. We appointed Julian Metherell as Vice Chairman of our Board, in addition to his role as chair of the Safety & Sustainability Committeem, and Kristin Holth was appointed as a Director to our Board.

And finally, we declared $0.05 per share dividends for Q3. And as we look ahead, our over 70% charter coverage of the next three years provides us with a high degree of revenue and cash flow visibility.

On slide 15, our new X-DF fleet has today to experience no COVID related delays. In 2020 and 2021, we’ll take delivery of seven of the latest generation X-DF vessels, all of which will go on long-term fixed rate charters to high quality customers.

The 12 vessels on this slide comprise one of the largest fleets of modern, highly efficient two-stroke X-DF vessels, once fully delivered will underpin our $375 million of annualized fixed rate revenue and nearly $3 billion of revenue backlog. Slide 16 highlights the fleet charter coverage of over 70% through at least the next three years.

This high degree of visibility for both revenue and cash flow underpins our stable and resilient business model. Our contracted revenues are predominantly at fixed daily rates of hire.

They have no commodity price exposure and our long-term customers are some of the LNG markets major participants. And whilst we have limited spot market exposure over the next several years, please note that for each $5,000 per day improvement in the TCE above our operating and overhead expenses, we will generate an additional $10 million in EBITDA during 2021.

In addition to providing significant financial benefits, our newbuild investments will also materially improve the carbon footprint of our fleet as shown on Slide 17. These latest X-DF vessels have 65% less CO2 emissions per ton-mile relative to our one steam vessel.

The figure on the left shows how the delivery of the first five of these vessels is lowering our CO2 emissions per ton-mile, which through the third quarter of this year are 16% lower than in 2019. Slide 18 highlights how we are managing the challenges brought on by COVID-19.

We remain fully focused on the safety of our personnel and delivering reliable high quality service to our customers. Unfortunately, COVID-19 has impacted our dry dockings and the third quarter was no exception as we experienced additional dry docking time to several of our vessels, due to the unavailability of manpower at the yard and the difficulty in getting service engineers into the country.

However, despite the pandemic, our new build vessels continued to deliver on time, on budget and immediately commenced their long-term fixed rate contracts. Our ability to change crews improved in Q3 as more jurisdictions began to allow crew changes.

However, much work still needs to be done before normality returns. We will continue to work with maritime authorities around the world to ensure the free moment – free movement of these key workers.

So in summary, I’m very proud of how GasLog’s employees, both the show and onboard our vessels have risen to the challenge of keeping the fleet operating and delivering a reliable high quality service to our customers, despite the immense challenges of COVID. I believe that GasLog’s operational platform is second to none and provides the bedrock for the ongoing and future success of the business.

With that, I’ll now turn it over to Achilleas to discuss the Group’s finances.

Thank you, Paul. Please turn to Slide 20.

The two charts on the left, so the company’s revenues and EBITDA excluding the contribution from GasLog Partners. Revenues and adjusted EBITDA for the third quarter increased 21% and 28% year-over-year respectively.

Our revenues and adjusted EBITDA were also 15% and 8% improvement respectively over the second quarter of 2020. As you can see from the panel on the far right, although we reported a modest loss of $0.01 per share in the third quarter, GasLog’s adjusted EPS was relatively stable on the year-over-year and sequential basis.

The delivery of GasLog Windsor, GasLog Wales and GasLog Westminster this year, along with the commercial strategy of maximizing the utilization of vessels trading in the spot market offset the clients from lower charter rates achieved by our vessels operating spot market. In addition, we experienced additional of high days for the vessels charter going as scheduled dry dockings due to COVID related delays as Paul discussed earlier.

Turning to Slide 21, and you can see that our cost reduction initiatives continue to be born out in our results. Our operating expenses for the first nine months of the year have averaged just under $15,700 per vessel per day, while our overhead expenses adjusted for certain one-off items, were approximately $3,800 per vessel per day, both significant improvements over 2019.

As we look towards the full year, we continue to expect our unit operating expense averaged $14,000 per vessel per day, giving effect to structural improvements in our operating costs, as well as the transitory gains in earlier this year, particularly with respect to travel related expenses and other COVID related savings. Lastly, declines in LIBOR have reduced the interest expense on the unhedged portion of our secured vessel debt by approximately $6 million during the first nine months of 2020, despite the increase of mortgage bank debt related to our newbuilding deliveries.

Slide 22 sets out our consolidated balance sheet metrics as of the end of quarter three, scheduled debt repayments over the next several years, liquidity and capital expenditures for the remainder of 2020. We ended the third quarter with net debt to total capitalization of 63%.

Our cash equivalent at the end of quarter three was $173 million. Since the end of the third quarter, our liquidity has been further bolstered by releasing approximately $26 million of incremental liquidity following the sale and leaseback of the GasLog Hong Kong to CNBL, one of the China’s largest lessor and our first financing the Chinese counter-party.

Looking forward, while our total debt will increase as we take delivery of our newbuildings, we will be amortizing our bank debt at a rate of approximately $266 million per annum when the fleet is fully delivered. Over the period 2020 to 2023 inclusive, we will entire nearly $1 billion of debt.

These amortization payments are underpinned by our consolidated charter backlog of $3.6 billion. Lastly, we have approximately $39 million of newbuilding cash equity payments remaining on four new building vessels delivering through quarter three 2021, including the GasLog Georgetown, which will deliver later this month.

We expect to meet these capital commitments with cash on hand plus operating cash flows. Moving to Slide 23, and our history of proactive refinancing of our debt maturities.

Over the last 12 months, we have refinanced approximately $1.2 billion of debt, including $1.1 billion of secured bank debt, which was GasLog’s [indiscernible] refinanced today as well as an approximately $90 million unsecured NOK bond. Each of these refinancing activities were carried out well in advance of their maturity.

With no bank maturities until 2024, we have now turned our attention to refinancing our 350 million unsecured U.S. bonds during March 2022.

Consistent with our history, we expect to make progress on financing this bond well ahead of its maturity. turning to Slide 24, for a summary and outlook.

We have continued to take material actions to strengthen the business, to increase the resilience and deliver a reliable, high-quality service to our customers. Our newbuilds continue to deliver on time and on budget and the three vessels delivered first five in 2020 drove strong financial performance for our holding fleet owned fleet in quarter three.

On fleet has a minimum of 70% charter capital for the next three years, providing us with a high degree of visibility and stability on our revenues and cash flows. We have bolstered our liquidity through the sale and leaseback of the GasLog Hong Kong, while opening new capital access in China.

And finally, the longer-term fundamentals of the LNG business remain robust. Natural gas and LNG will continue to replace coal and tariff hydrocarbons as a primary energy source for many years to come.

And remain the ideal partner for renewable energy. The growing demand for LNG will produce a growing demand for LNG shipping.

And GasLog’s size, operational platform and reputation means we are ideally placed to benefit from these favorable trends. With that, I would like to open it up for questions regarding GasLog Ltd.’

s third quarter. Operator, can you please now open the call for any questions?

Yes. Thank you and good afternoon, and good morning, everybody.

Realizing this question could kind of also be asked the GasLog Partners, but I think it’s important just because, what it means for kind of the global LNG shipping market. And really what I’m getting at is, kind of, it seems like some of your assets and maybe other competitors assets seem to be starting to find opportunities as infrastructure assets and really, it seems, if we were to go back seven, eight years ago, the world was going to be littered with FSUs and FSRUs kind of all over the world.

And while that didn’t play out the way many of us have thought, just looking at what GasLog as a whole company has been able to do over the last year with a couple of its ships. It’s interesting that opportunity finally looks to be playing out with the FSR – FSU project in South America and in Asia, and there’s reports of one in Africa.

So Paul, if you talk a little bit about what you think has changed, if anything, and really what else is the company planning to kind of continue to take advantage of this?

Yes. Thanks, Greg.

You’re absolutely right. I think as you look at the market at the moment, there are definitely a number of opportunities for the – on the infrastructure side.

And I don’t think that comes by accident, though. I think there’s been a lot of work going on behind the scenes.

The truth is that these infrastructure projects do take a long time to bring to market. And they have a much more red tape sometimes to get through et cetera, than just going out and ordering a new ship.

But the fact that LNG is now such a price competitive commodity is available and it’s available in smaller volumes to many more buyers now, I think, is stimulating the interest in these infrastructure projects. As you said, we very closely involved in the FSRU in Greece.

We have the FSU project in Panama. And the charters that we’ve done recently on a couple of our steam ships are much more kind of logistics oriented than shipping.

As in we’re moving cargoes, but we’re also storing them. We’re also breaking bolt-in STS shipments.

And I do see that’s a market where our steam ships actually are very competitive, when you’re not steaming a lot with the vessels when you’re just a sitting and storing. Then they can be much more competitive, especially as a lot of the areas that these projects are being developed in are restricted, in terms of size, et cetera.

So I think it’s a combination of LNG continuing to be a very attractive commodity, which people want to get hold of. And the fact that a lot of the projects that have been taking time to develop are coming through.

So yes, very interesting times I think for infrastructure development in LNG.

Okay. And then just one more for me around.

I mean, clearly the bulk of GasLog’s fleet is, the new builds are contracted. You do have a little bit of spot exposure with those one or two vessels and depending on how things roll off.

Just as we think about that and as you think about positioning the fleet. Is there any benefit for you to kind of have one or two vessels consistently trading in the spot market?

Or if this winter rally is a little bit stronger and a little bit longer than we think plays out. Is there some – is there kind of – could we see your spot exposure kind of just be eliminated for 2021, i.e., fix out the whole fleet for the calendar year.

Yes. I think, Greg, we’re looking at that on an ongoing basis, what’s interesting.

The big development in the market has been the fact that a lot of our customers, especially the traders are interested in taking floating rate, charters, but which actually increase the utilization of our vessels. And that, I think, is a very market because one of the things in the past that’s been difficult trading spot is making sure you get the utilization up.

So having that option, I think, is very useful to a ship owner and means that you can be more choosy about whether you want to put your ship on a fixed rate charter, as opposed to a floating rate charter. And I think, the great thing about that is that we can then decide as we see the market, do we want to go fix.

Do we want to go spot? So I wouldn’t be afraid of having our ships in the spot market.

As you say, we have limited exposure. The spot market is something that I personally know very well, having been in the business 35 years and spent most of my time in that spot market and something which I frankly enjoy.

So we wouldn’t shy away from that and very happy to trade in that market, I think have the skills to do it, but we will be always constantly taking, what’s the advantage of at this point, locking in a fixed rate, as opposed to keeping those ships floating, especially when we can do it on a floating rate charter with our customers.

Okay, great. And then just Paul following up on that, just – it’s something that we’ve typically seen a lot in other shipping sectors, right, like, you constantly hear about that in other sectors.

When you talk about these, whether it’s – I guess it’s not a COA, it’s just a charter and a floating rate. But as we think about that, I mean, at this point in the market, is there any sense for how many of these kinds of contracts are out there in the market right now?

Yes. I mean, I think if you look at our open fleet consolidated now across GasLog Partners and the GasLog Ltd., we’re probably something like 30% to 40% of our fixtures are done on that.

So there’s – I think, as traders come into this market, there is a growing desire to go to look at those kinds of deals. And that’s, I think, then going out to other, the customers in the market.

The other thing, I think, that will help that and be of interest to chip owners and charters going forward is that we’re starting to see the growth of a derivative market in LNG as well, where you can use freight forward instruments to hedge positions. So therefore, you can take a floating rate and at some point decide if you want to turn that into a fixed rate.

So I think all those things are very much part of a growing spot market – a maturing spot market, a spot market, as we said, there’s got much more liquidity in it. And I think you’ll continue to see those types of instruments, those type of floating charters increase.

Perfect. Thank you very much.

How are you, gentlemen. How’s it going?

Hello, Randy. Good.

Thank you.

Great. I guess, first question, in the recent years during the strong winter, especially, December, GasLog has announced special dividends, right, in late fourth quarter.

Now, is that the goal again this year? Or would you rather repurchase the unsecured debt or the preferred equity with any excess cash?

I think our focus at the moment is around some of the uncertainty we’re seeing with COVID. As you look out to the next year, Randy, despite some of the great news that was out yesterday, I think there’s still a large amount of uncertainty in the market about, how that will play out.

I think it’s very good that we’re seeing the strength in the market right now. I think if we continue to see strength in the market, then, returning cash to shareholders is something that we would very much like to do.

And I think over the long-term, as we see rates coming back towards mid-cycle rates, getting our dividend back to pre-COVID levels, is something that we definitely are aiming for. But I think at this stage, it’s probably a little too early to call that and obviously that would certainly be a decision for the board, but obviously, very positive that we are seeing good cash flows and good earnings in the fourth quarter.

Got it. Okay.

So no special dividend, but pretty confident in the current $0.05 dividend per quarter going forward.

Yes. I think, for us, it’s incredibly important that we’re able to reward our shareholders with a dividend.

And as I said, we very much believe long-term that this business can return back to the dividend back to the sort of pre-COVID uncertain times – after the pre-COVID uncertainty has gone. Sorry.

Excellent. All right.

And then for my second question, any updates on the gas trade Alexandroupolis FSRU or the Philippines FSRU, and then how is the Singapore FSRU conversion progressing? I know it was delayed.

When is the start date and maybe the new end date for that.

Okay. On the Alexandroupolis project, we have some updates lately.

We have a fifth shareholder in gas trade. This is DESFA that acquired the 20% is the operator of the national natural gas transmission system in Greece.

This is an important addition and development ahead of the FID of the project. That is scheduled to take place at the beginning of 2021.

So this project – respective of the delays the previous years had some significant developments over the last year. So it’s progressing well, I would say.

Now on the Panama project and the conversion of the vessel to be an FSU. There has been a delay due to COVID, but it is progressing and expected to stop early 2022.

The conversion of the Singapore will be in quarter one 2020. And it’s scheduled to – the vessel to be on-site mid-2021.

Got it. Sounds good.

Well, that’s it from me. Thank you so much.

I’ll hop back in for queue.

Thank you, Randy.

Yes. Good morning guys.

So I’ll start with one, I think, Peter, you had mentioned that going forward, you were hoping that operating expenses could come down by $20 million a year. I was hoping for a little color on that.

Obviously, it seems like operating expenses are one of the harder things to move from a cost basis. But the other thing that was interesting to me is that the fleet is actually scheduled to grow, of course, the next six months or so.

I was hopeful that you might be able to shed a little light on how that – you expect to drive down or cut out $20 million at the same time the fleet is going.

Yes. Sorry, is this for me or for Peter or for Achilleas.

Whoever wants to – I’ll leave it to you.

Well, Achilleas, why don’t you have a go at it, and I’m happy to fill in on a high level, if you feel you need to. Go ahead.

Thanks, thanks. So just to say a few things for what we have done already because this is an important topic for us.

We have paid a lot of attention. So we have done great progress, both on the G&A and the operating expenses.

We have, as you know, moved many of our people to Greece, we have closed offices and use the size of the London office, we have saved approximately $9 million on the G&A. And we have paid special attention to have a lean management structure and streamline the decision-making.

On the OpEx side, again, we have seen reductions on the operating expenses. The focus is to continue this effort and identify efficiencies we have a focus also on the digitization that can create efficiencies and save costs.

And actually, as the business increases and matures and the fleet increase and we take delivery of the new modern vessels. The lever – the operational leverage increases as well.

So it’s easier to find efficiencies.

Let me add to what Achilleas said, the largest component of the operating expenses, is the, uh, crew wages, and we’ve spent a lot of time and continue to examine our manning programs. And we’ve been able to find some additional efficiencies, both in terms of the type and number of crews that we would be deploying on the vessels.

That’s a major part. The other large part of this is the way we look at dry dockings.

And we’ve been exploring, with some success, the ability to start to bring the regular dry dockings of these ships into areas other than Singapore, where there may be a cost advantage such as such as China, Middle East and areas like that. And so those two particular areas are areas where I’m encouraged that we should be able to get some real operational cost savings.

In addition to that, we’ve been looking at the processes. We’ve been very involved in using data analytics to review a lot of our processes, and we’ve been able to streamline a number of our processes on the ships, which have a consequent reduction operating costs.

I hope, that’s helpful.

No, that’s tremendously helpful. And just to clarify, despite the fact that the ship count is going to be a little larger, you would be hopeful that actually OpEx might be lower next year.

Is that a fair modeling assumption for us?

Yes, it is.

Okay. And then my second question really quickly is I know that last call, you guys had booked a number of sort of intermediate level charters in the third and fourth quarter.

And it smooths the curve a little bit and maybe missed some of the really frothy market. We’re not quite in the same level of prof at the moment than we were in last year.

But was curious, just again, on how we should be thinking about the fourth quarter and the first quarter with respect to the smaller portion of the fleet that is open? Is there a portion of the fleet that is "spot" that is already booked?

Or are you benefiting from some of the rates north of $100,000 a day that we see at the moment?

Yes. A little bit of both because as we talked about in the prepared remarks, the fact that we’ve managed to sort of hold the – get 70% capture rate, hold the rates, the earnings at similar levels on the spot ships to 2019 despite the headline rates being down 30% is because of that sort of strategy of fixing sort of longer-term and fixing into that – into positions of strength, but maybe missing some of the top of the market.

However, as I talked about earlier, you’re looking at sort of 30% to 40% of the ships in the spot market from us also now being on floating rate charters And whilst there are some floors and ceilings on those, they are much more operationally leveraged to the upswing. So we will be able to benefit from the upswing in the market as well, despite the fact that we talk about being 90%, 95% covered for the fourth quarter because that coverage includes ships which are on floating rate charters.

So it will be a little bit of both. And I’m very happy with that kind of mixture that we have in terms of making sure that we fix forward to ensure we have good cash flow if and if the market comes off at all next year, but also some upside to the strengthening market.

All right. Thank you.

Good morning, guys. James on for Chris.

Wanted to touch on the sale-leaseback of the GasLog Hong Kong in the quarter? Was this essentially something we should be expecting more moving forward?

Or is it really about sort of funding an advantaged source of liquidity, given some of the challenges from COVID-19? Just wanted to get your around the deal.

Yes. First of all, we are very happy to have opened a new financing market for GasLog in China.

For us, this was particularly important. It is a market that is growing, and we’re going to have access so opening this market in the middle of the COVID uncertainty.

It is an additional success, in my view. With this deal, we also managed to improve the profile of the vessel repayment.

The facility significantly versus the previous export led credit facility, and it will also at competitive terms. So classic provides additional liquidity.

So I would say that, overall, it was a very I think successful deal. So this is an opportunity that we have to do more.

It’s not certain, but it is an interesting deal, I would say.

Got it. But just maybe at a higher level, just understanding how you sort of think about leverage.

Your current amortization profile is something that you’re – or schedule rather something you’re comfortable with? Or should we look for you to prioritize that more so moving forward, just kind of trying to understand your thoughts around leverage?

And maybe that deal within that sort of broader idea.

This deal actually did not change the breakevens of the vessel because he has a much longer profile. So if you look at it on a net debt basis, the incremental cash practically has not changed the leverage.

Okay, thank you.

I think the one thing I’d add to that, of course, is, as we said in the prepared remarks, James, we have almost $1 billion worth of IMO that we’re going to be doing on a consolidated basis over the next four years. So given the life of the assets, the amortization schedule is quite aggressive in itself.

So you see the deleveraging coming through quite quickly, given the amortization of the debt.

Great. Thank you for that.

Perfect. I’ll hop back in the queue.

Hey, guys. Yes, I just wanted to ask, 2020 has been obviously very eventful for GasLog.

And we refinanced the $1 billion of maturities that were due next year. That was a key priority and you centralize management in Greece, another key priority.

When we think about priorities going forward, what’s next on the docket from here? Is there one key thing that stands out for you as you kind of approach 2021, whether it’s a strategic or operational or financial priority?

I think, Omar, we’re having Peter on the line and the Board being very much focused on strategy, that’s probably a good question for you to take, Peter.

Yes. Omar, I’m happy to do it.

Look, the priorities, if you break them into short, medium and long-term. In the short-term, like a number of our competitors, and in fact, the industry at large, there are some macro headwinds that we believe we have to face and get through in a strong manner.

And that obviously is COVID and the returns to post-COVID return normality, particularly in the energy sector and consequently, the shipping sector. So that has been management’s focus from the early part of 2020.

And I believe that will continue, certainly, into the early part of 2021 as we continue to see this second spike and the consequences of the second spike, which are yet uncertain. In the medium term, we would be looking at our strengthening balance sheet in the business.

As putting it in a position where we might take advantage of additional growth CapEx around new projects that are coming on in 2024 and 2025. But there’s no urgency for that at this stage.

We believe those projects are likely to be delayed as liquefaction projects always are, and it gives us plenty of opportunity to sort of reset the platform in anticipation of that. Over the long-term, it’s very much understanding how LNG is used as a transition fuel, both in the transport sector and in the global economy, positioning ourselves around that and looking at different alternatives, in terms of LNG use and ultimate fuel use and our ability to provide midstream support to those new fuels and those new fuel uses.

So that’s how we sort of break it out. But it’s all hands on deck for the short-term at this stage.

I’m hopeful that by the time we get into 2021, we should be seeing some normality returning. And one of the big objectives that I have is to get the dividend back to its pre-COVID levels.

That has always been a key factor of what we do. So it’s about balance sheet strength and free cash flow in the short term.

Great. Thanks, Peter, for breaking it up that way, in the short, medium and long-term.

One – maybe one follow-up to that is maybe for the medium-term. And as you mentioned, the growth opportunities come 2024, 2025.

Residual risk is – has been this ongoing concern, especially in the LNG space, that once the newbuilding charters roll off, you still have a heavy asset still that needs to be paid down. When you think about that time to invest, you’ve done several contracts over your history.

The upcoming four newbuildings with Cheniere, those are seven-year charters, which kind of leave you some exposure, even though these are fantastic assets. When you think about, say, the next wave of investment on your side, do you see yourself going beyond that seven-year term and looking for something much longer in duration?

Well, it’s interesting because the technology curve that we’ve talked about on a number of these calls and that has really driven the LNG shipping market has absolutely flattened out. We went very rapidly through two changes in propulsion systems from steam to TFDE to the supposed to be diesels.

We did size changes of early steam ships at 128 going up to an optimum size of about 175, 180. But all that has sort of flattened out.

So my worry, the technological obsolescence on the ships that we have now coming into the fleet for the charters with people like Cheniere, is going to be less of a risk than it was five years or six years ago as the technology curve changed. The other thing that one should consider is that when people were making the investment decisions on new ships, they were looking at ship lives of 35 years and in some cases, longer.

If you start to overlay the IMO requirements of 2050, where we should quite rightly be seeing some new technology in terms of marine propulsion and marine fuels. The potential for a commercial life of a newbuilding in 2025, going 35 years beyond 2050, becomes somewhat more challenging.

And this should drive the economics in a way that any newbuildings coming in 2025, 2026 need to make financial calculations on a shorter commercial life, which gives some advantage to the ships that are coming out in 2020 and 2021, such as ours, that are very similar in technological capabilities. Now alongside all that, there are opportunities to do evolutionary rather than revolutionary changes to the existing ships.

There’s a number of technological devices that can be added to existing ships that will improve their efficiency. And there are one or two revolutionary changes that might be retrofitable to things like the TFDE ships.

I mean, if you have any confidence in fuel cell technology, and frankly, I do, doing a fuel cell conversion on TFDE is significantly more likely than you would on a slow speed diesel ship in the half of the propulsion system that ship is electric motors anyway. So these are the kinds of things that we’re exploring.

There is no silver bullet. And the technology is still very much at an initial stage.

But we’re hopeful that the residual risk on certain ships that we have today, such as the TFDEs may change around the ability to do things like fuel cell conversions and that the residual risk on ships that we have of the newer technologies is going to be somewhat balanced out by the shorter commercial lives of a new building in 2025 or 2026, if that makes sense.

Yes, absolutely, Peter. Thank you for that.

That was very informative. I’ll leave it at that.

Thank you.

Hey guys, I’ll just try to be quick with just one today because I’m sure you guys want to move on to that presentation. The senior notes, you’ve obviously done a great job pushing out maturities and addressing debt loan before it starts to become a problem.

With those senior notes, is that going to have to be a bank financing solution? Or could you potentially address that with Asian lease finance?

And also, are you having any issues with European banks getting more stringent due to kind of carbon controls? And in terms of what they’re lending?

Or is that market still pretty much wide open?

Yes. This is Achilleas.

Listen, we continue to explore all options available. We have a history of proactive refinancing, and we don’t expect that it’s going to be different with the U.S.

bond. The U.S.

bonds, we have the benefit of time at this point. They are due in March 2022.

And we have cleared the way with all the actions that we have taken. Refinanced all of our bank debt.

Our CapEx is – our CapEx program is completing in 2021. So we have options available.

We are exploring them. And we believe that we will be able to do the refinancing well ahead of its time.

The European banks have capacity but it is part of the options that we are exploring. It will be – it could be a mix of pure refinancing of the fuel bond refinancing.

All right. Thanks, guys.

Good morning, guys. How are you?

Hello, Mike.

I wanted to piggy back off of Omar’s question on residual value risk. And Peter, you gave a very helpful answer.

But one thing that I didn’t hear in there was a lot of commentary around new business, and that could just be that you didn’t get to it. But in terms of the value proposition for new tonnes year.

I mean, even the block of ships you guys have going on to Cheniere or I guess the block of ships Cheniere is taking. There’s a material degree of variance in the returns from ship owners that are participating in that block.

Where do you think the actual IRR is right now on new business signed today? Within the LNG market short-term.

And I know that’s a very big question and term can drive a lot of that. But maybe apples-to-apples some a couple of years ago, is it a couple of hundred basis points lighter than it was?

And does that and how does that impact the way you guys think about deploying capital?

Mike, I frankly have been surprised at the willingness of some of the new entrants to charter new ships at levels that we simply would not do. And so I don’t really understand what parameters are using to come to their – to their return thresholds that they’re comfortable with.

But again, the return thresholds on this business are very much driven by where you see the residual risk? And at what point in the life of the assets you see the residual risk.

So you can play with those numbers and really make the numbers with 1 or 2 percentage points of the down look any way you want to look at them. From our perspective, we would really need to see a north of 9% unlevered return to feel enticed to go ahead in terms of deploying capital into new buildings.

And we’re taking a very disciplined view on our CapeX. I think we’ve had a remarkable growth in 2012.

We’ve had a remarkable growth since 2016. I think now it’s the time to sort of reap the rewards of that, which I would look forward to and start to give some meaningful returns back to the shareholders.

It doesn’t mean that we’re not going to be opportunistically looking at the growth opportunities, but we’re not the LNG shipping company for every men.

As it pertains to new business, and again, hearing everything you just said around – you certainly hampered down your focused on margins, which makes sense, and you’re kind of gathering cash flow from the expansions of the past cycles. But if I were to look at across the tenders in the market right now, I don’t know many that would check that box say for a couple, and the biggest one is probably Arctic 2.

And I know that’s a difficult gamut considering where those ships are being built. And the risk, the tail risk, but it is one of the overly you probably could get term and probably return that meets that hurdle.

Is your view on that changed at all in the past year, 1.5 years since we last talked about it? Not to put you on the spot.

Mike, which project? I didn’t hear which project you said.

Arctic 2.

Arctic 2. I mean, maybe I can give you my view on it.

I think it’s always a risk reward, isn’t it? So the return that you get has to be commensurate with the reward.

And whilst you may be able to get term and maybe better returns, you have to weigh that up against the perceived risk going into it. So I don’t think there’s a free lunch there.

I think just picking up on what Peter said earlier, one is we have a lot of inbuilt growth still in the business. We don’t need to grow at this point.

We’ve seen returns five years ago dipping. We saw them come up again.

And when we did our newbuildings, and we were successful in getting returns, which met our threshold. And we’ve seen them go down again.

And I’m pretty certain you’ll see those returns go up again. I don’t think it’s a downward slope, but I think it’s more of a sign curve.

And I think we will be very careful to make sure that we only invest when we feel that, that’s the right time for GasLog. And I think there will be opportunities other than just, for example, going into the Russian projects, where we’ll be able to do that in the future, but we’ll be disciplined.

Apologies to you all, the vagaries of lockdowns in Greece, I got disconnected. I hope Paul was able to give you a satisfactory answer, Mike?

As always, yes, it was one point. I will just ask my second just around is the short one.

In terms of ancillary businesses, where does LNG bunkering all for you all in terms of a potential way to eventually deploy capital at a return that might be higher than new traditional LNG business right now? And maybe so that’s a recent degree of vertical integration?

Look, I think LNG bunkering is an interesting growth opportunity. We look at small-scale LNG as one of our options in the medium and long-term.

But we also look at other tangential areas where we might be able to deploy the platform. That could be more interesting than simply the LNG bunkering sector.

I think the LNG bunkering is certainly something that’s going to be driven by the majors, Shell, in particular. So it’s interesting.

It’s not the first thing that I think about as I look at the medium and long-term. But it is on my list.

I mean, we missed the opportunity to do an Investor Day in 2020. Hopefully, we’ll all be able to meet up and do that.

And I would be very much looking forward to the point to putting through some ideas of how I see the evolution of the GasLog platform.

Got you. That’s helpful.

Thanks for the time guys. Appreciate it.

Thank you.

Thank you very much, Jimmy, and thank you to everyone for your questions on GasLog Limited’s third quarter. I will now turn it over to Mr.

Curt Anastasio, Chairman of GasLog Partners, for his opening remarks of the partnership’s third quarter results.

Thank you, Paul. Slide 27 sets forth today’s key messages from GasLog Partners, but I think it’s important to take a few minutes to provide some context for the decisions we are taking, including the distribution reduction.

GasLog Partners was created primarily from the growth of GasLog Limited, which was done very effectively since its IPO in 2014, during which $1 billion of equity capital was raised. At the same time, the partnership grew via dropdown acquisitions from GasLog and increased its distribution of the common unitholders every year until this year.

Approximately $455 million has been paid out to the common unitholders and 24 million of units have been repurchased. It’s no secret that access to capital markets for MLPs has deteriorated due to various factors, resulting in a significantly higher cost of capital for GasLog Partners.

Faced with a very unfavorable market for MLP equity, the partnership was able to secure alternative sources of funding via our three series of preferred shares, with respect to which $82 million of dividends have been paid in the aggregate. But that option is not unlimited.

With the rapid growth of GasLog’s fleet drawing to a close and our continually high cost of capital, the partnership was the first marine MLP to eliminate its IDRs in 2019. In early 2020, we made the difficult decision to reduce our distribution given the poor state of the MLP market and the elevated level of downside risk in the LNG freight market.

Shortly thereafter, the global impact of the COVID pandemic, including its impact on energy demand, became painfully evident, and this Board supported management’s initiatives to reduce operating expense, capital expense and G&A., which is an ongoing effort you are hearing more about today. That included closing our Connecticut office and reducing the size and expense of the Board, among other steps.

Management also successfully refinanced our debt on improved terms, pushing out our nearest debt maturity to 2024. And all the while, we managed to run a first-class safe and sound operation, mindful of all of our stakeholders, not only investors, but also employees, including those at sea, who face particular difficulties during a global pandemic, while enhancing our efforts to protect the environment now and in the future.

We are proud to have published our first sustainability report during this period of unprecedented crisis. As you were hearing today, the LNG freight market has improved substantially this fall, and the partnership expects to benefit from that.

Our commercial team has had some notable success re-chartering vessels, including our steamships. But as we look ahead to 2021, we see continuing uncertainty in the world.

Rather than rely on the continuation of improved market conditions, we believe it to be prudent to continue to derisk the company and prioritize preserving liquidity and further delevering the balance sheet. Your Board and management believe that is the best course for now, notwithstanding some interesting commercial opportunities for the partnership, which you will also learn out today.

In the course of considering strategic alternatives for GasLog Partners, management and the Board have come to the conclusion that all stakeholders would best be served by an independent review of such alternatives. The Board has therefore decided to engage an independent financial adviser to advise if and management on the partnership strategic alternative.

We expect to select the independent adviser in the very near future and to have the review completed, not later than the first quarter of 2021. With that, I’ll turn the microphone over to our CEO, Mr.

Paul Wogan.

Thank you, Curt. On Slide 29, I discuss GasLog Partners’ third quarter highlights.

Where despite a difficult quarter, we executed on new charters for two of our steam vessels, including a three-year charter for the Methane Alison Victoria as well as a multi-month charter for the Methane Jane Elizabeth. Together, these fixtures help to increase our charter coverage to 99% for the fourth quarter.

We repaid $33 million of debt, bringing our total debt repayment to approximately $88 million thus far in 2020. And lastly, as Curt discussed earlier, the Board and management have initiated a review of the partnership’s strategic options.

Slide 30 shows that whilst our fleet’s charter coverage is now over 71% for 2021, our operational leverage is set to increase in the coming years. And as our vessels complete their initial shell charters, although we have successfully re-chartered several vessels, these new contracts have been at lower rates.

Given the present market conditions and future COVID uncertainties, we will continue to focus on reducing our financial leverage. As Achilleas will discuss shortly, the partnership’s balance sheet is robust, and we intend to strengthen it further to meet the demands of a shorter charter portfolio.

Combined with our focus on further reducing operating and overhead expenses, our breakevens will continue to lower, improving our fleet’s potential free cash flow capacity. Slide 31 highlights our recent commercial successes.

During the third quarter, we signed a new three-year charter for the Methane Alison Victoria with CNTIC VPower, an independent energy company. The vessel will transport, store and breakbulk LNG into Myanmar, which imported LNG for the first time in June this year.

In addition, we’ve also recently agreed a multi-month charter with optional periods for the Methane Jane Elizabeth, to deliver LNG into a terminal in Taiwan with size restrictions. And as a reminder, earlier this year, we signed a two year charter for the Methane Shirley Elisabeth, with Jovo, another leading independent Chinese energy company.

These charters highlight the developing opportunities for our steamed turbine fleet, where the short voyage distances, storage requirements and physical terminal restrictions mean our vessels can compete with larger, more modern vessels. The higher rate is lower than the vessels initial charters when acquired by the partnership.

However, they provide 100% utilization giving us visibility and security of earnings. And as the amount of LNG cargo traded in the spot and short term market increases, it will continue to increase the amount of spot and short term business for our vessels.

This is something that I’m wholly comfortable with and frankly, enjoy. And I spent most of my 35 year history in shipping trading spot ships.

I and the whole commercial team believes that by really focusing on this aspect of the market, GasLog Partners has the opportunity to excel in this area and create a market leading position. And with that, I’ll hand over to Achilleas to take you through the partnerships financials for the third quarter.

Thank you, Paul. Turning to Slide 33 and the partnership’s financial results for the third quarter.

Revenues for the third quarter was $73 million, adjusted EBITDA was $47 million and adjusted earnings per unit was $0.11. 25%, 35%, 78% declines respectively, compared with the thir quarter of 2019.

In addition, revenues, adjusted EBITDA and adjusted EPU show declines of 13%, 22% and 71% respectively compared to the second quarter of 2020. Financial results for the third quarter were impacted by the expiry of the initial multi-year charters, further of our partnerships, steam turbine vessels and the expiry of and 18-month charter of the GasLog Signa.

While we have taken steps to charter our fleet and maximize their utilization, the outbreak of COVID-19, the company demand growth for LNG in 2020, particularly during quarter two and quarter five. In addition, three vessels were off-hire for a total of [indiscernible] days related to this scheduled dry dockings, which were extended due to the challenges with manpower, the yards, a consequence of value slowdown measures in Singapore throughout the year.

Looking forward, the partnership has one vessel scheduled for dry docking in the fourth quarter, the Methane Adesa, which we anticipate will take 40 days as the vessel is having a ballast water treatment system installed a regulatory requirement. Slide 34 shows that the partnership’s credit profile continues to be resilient with net debt-to-capital at 53%.

It is important to note that GasLog Partners has not committed growth CapEx, but we will have one scheduled dry docking, as I previously mentioned. We expect to continue strengthening the balance sheet beginning with the retirement of approximately $19 million of debt over the remainder of this year for a total of $107 million in 2020.

Reducing debt balances. We reduced the partnership’s cash flow breakeven levels over time, improving the competitiveness of our fleet.

Turning to Slide 35 and a look at the potential impact, debt repayment and cost reductions can have on our competitiveness. The charts on this slide display the average cash breakeven for the partnership’s 155,000 cubic meter TFDE vessels as well as its 145,000 cubic meter steam turbine vessels.

As you can see, capital costs, including amortization and interest expense, make up most of the vessel’s cash breakeven. Our focus on debt repayment and cost reductions over the next several years will have a significant impact on reducing these values over time.

For example, its $110 million of debt retired, approximately equal to our annual scheduled amortization over the next three years, reduces our fleet’s cash breakeven by approximately 1,700 per vessel per day. This improvement to our fleet’s cash breakeven will enhance our cash flow capacity over time.

With that, I would like to open it up for Q&A. Operator, can you please now open the call.

Yes, hi. Thanks for fitting me in, again.

My first question has to do with the thinking on timing really more than anything else with respect to the distribution cut. The strategic review is just being undertaken now.

And I was curious why you decided to go ahead and cut distributions prior to the strategic review sort of in advice from advisors.

Yes. Ben, it’s Paul here.

I think, as we look at this, we have considerable uncertainty still in terms of COVID, hopefully, we’re being conservative, especially with the news the last couple of days, but I think whatever happens with COVID, the return to normality in the world is going to take some time. We – the management and the board felt it was prudent to do to move quickly in this respect.

And to make sure that we considerable liquidity and continue to protect the balance sheet to put the partnership in a very strong position coming out of this. And so rather than, wait for the strategic review, we wanted to be ahead of the curve and to act proactively.

And we’ll very much look forward to reporting back following the strategic view of this upcoming.

And then my follow-up, in the last, well, in the first part of the call, Peter has suggested that the one steam powered ship that’s owned by the parent, you were looking to redeploy, which obviously you’ve done on a number of assets at the partnership or sell. Is the same true of assets, obviously redeploying is, but would you look to maybe sell some of those steamed powered ships that are held at the partnership if employment – long-term employment, dismaterialize?

Yes. I think there are basically three options for us here.

One is to redeploy. I’ve been very pleased with how we’ve been able to do that.

And I think the charters that we’ve got positioned very well to do more of those more logistic type businesses. The second thing is to look at joint ventures with certain companies around those assets, where they work well for those assets.

And I think, that’s something that we’re also exploring. And the third option is to sell now – selling right now, I would not be in favor of we’re in the middle of a lot of COVID uncertainty and a liquidity in the market.

But certainly, I think as we come out of that, and if there are opportunities to sell the vessels, then we would also look it up then. So, I think those three options give us a lot, three alternatives gives a lot of optionality around those vessels.

And then the final thing I’d say about those bachelors is, there’s 235 ships still in the world, steam fleet. These ships, the reason we’re getting them away and fixing them and these are some of the most modern and some of the best performing ships in that fleet.

And so if you, like, when we’re looking at these types of projects, these are the first ships off the block. So, a very different animal to some of the older, smaller steam ships, which I think are going to be marginalized quite quickly.

Okay. Thanks, Paul.

Hey guys. I realize, it’s probably a bit early to talk about what kind of conclusions the strategic review might lead to.

But through your remarks, you’ve made it clear that the cost competitiveness for the fleet at GLOP is going to be very important in terms of winning business in the tight tightening market and with assets that may not be premiere and brand new. So what sort of savings do you think you could get in terms of I know you’ve already reduced the, the public trading costs of gloss by consolidating some management and taking other steps.

But there’s come a point, where there maybe a private option would make the fleet more competitive, against the rest of the players that you’re competing in that kind of frontier market you’re describing.

I think, as we’ve talked about, Sean, we’ve done a lot of work around the, uh, cost of the business, both in terms of cutting the OpEx and the G&A. And we’ve also done costs in terms of as Curt outlined, cutting the costs of the board as well.

So I think we’ve been doing a lot of those things. I think part of this strategic review would be to look at all options for the company, which I would imagine would also include a take private.

But there isn’t a – that’s not necessarily a focus for us right now. We think there’s a very much a future for this business in the public markets.

Okay. I think it’s interesting this strategy you’re sort of laying out and competing in markets like the breakbulk in Myanmar, and some of these new emerging markets.

And do you see, I would imagine that initially that a lot of them are sort of on more DS type contracts. But do you see any interest from these parties as they become more experienced in trading in the LNG markets that they might start looking to people, companies like yourselves to do long-term charters, like a more established player that you’re used to dealing with at like the gloss level?

I think that’s one of the things that I was alluding to it didn’t really flesh it out, Sean, so thank you for the opportunity. I think as these companies develop, there will be more opportunities to be a larger part of that.

So I think they will integrate both their breakbulk and bringing the cargoes in potentially buying FOB, et cetera. And I think that’s the exciting bit for us in GasLog, as we get – if you get into these projects at an early phase.

I think there will be more spinoffs for the other ships in the fleet, to be part of supplying that – those customers. And I think, the growth potential for some of these customers in China is huge.

So, yes, I think that’s going to be a really interesting opportunity for us.

Okay, thanks. I’m going to turn over.

How do you gentlemen has gone, again. I guess for me, the questions are on guidance on the rate and the duration for the Methane Jane Elizabeth charter, and then the rate for the three-year Methane Alison Victoria charter.

Yes. I mean, we can’t actually give out rates, Randy, because they’re confidential to the charters.

But if you look at where the brokers are putting the rates at the moment, I think, so far this year, Clarksons have fixed the steam rates on the spot market around 30,000 a day. Poten are putting the one-year rate for steamships in the high 20s.

So I think as you look at the opportunities for the steamships, I would say that those broker rates are a pretty good guide.

Got it. Three-year, you would expect to be lower than the one year, fair?

Not particularly.

Okay.

As I think we – sorry, Randy. And the reason for that is, I think as we look at the three-year market, I think we see a tightening market coming in over the next three years.

So for us to discount a one-year rate to a three-year rate may not be the best thing for us to do. So I think there are – as we look at it, there are factors that would work against or argue against giving any discounts on the one-year rate.

Got it. And then on your other vessels that are either in the spot market or short term market, is the plan to keep those having some availability?

Or do you want to have kind of full charter coverage throughout 2021? Or is that all kind of contingent upon this review happening in the next few months?

Yes. I mean, I think whilst that review is going on, I think we will continue to do what we’ve been doing, which is try to maximize utilization.

So some of that will be, I think, done through making sure that we have the ships on charter with fixed rates. But part of that getting that utilization up can also be, as we discussed on the limited call, through variable rate charters, which keep us with some exposure, some open to the market.

So I think you will see us trying to deploy a mixture of those two strategies on the fleet. But obviously, if we feel comfortable with the fixed rate charters over a period, then we would continue – certainly continue to fix those.

Got it, good deal. That’s it for me.

Thank you.

Thank you, Randy.

Yes. James on for Chris.

Just understanding that are acknowledging that there is a strategic review ongoing. But I just wanted to get a little bit more detail around how you’re thinking about the dividend reduction.

And just as we look through 2021, if we see a sharp rebound? Or could it actually be something that might be adjusted midyear?

Or is it really something that was sort of like more driven by the level of debt and it’s probably something that’s unlikely to change over the course of one year?

And I would – I don’t know. Curt, would you like to take that question?

Yes, sure. I mean, I don’t want to preclude anything that may come out of the strategic review.

But as I’ve said in my remarks, we were focused on retaining that $22 million or so to preserve liquidity and continue delevering during this period. And while we’re certainly, I think the – I would never preclude the Board from revisiting dividend decision as we move forward.

I personally just as one Director, would not expect any change to what we’ve done during this review period, but we’ll see, just a view of one Director.

Understood. And I guess, a little bit along that point, just thinking about the capital structure, in general.

And I think there’s a general tone of moving towards something more short-term basis and a little bit more rate volatility from a revenue perspective. Is the capital structure is something that you think fits that?

And then again, understanding there’s a strategic review going on, but are asset sales something that you think might be the best avenue for sort of deleveraging if you think that’s a problem? Or do you think that maybe an equity raise, just trying to understand your thoughts around sort of the capital structure and sort of the change evolving revenue model?

I do think we need – Go ahead, Paul. You take it.

No, no, please, please. Go ahead, Curt.

I was just going to say, in terms of the capital structure, I do think we would be best served by continuing to delever. That was one of the motivating decisions behind the actions we’ve taken, not just on the dividend, but on OpEx and everything else.

And get down, what’s proven to be a very high cost of capital, given that capital markets now days for us, and that will reduce our fleet breakevens. So I think in terms of capital structure, I mean that’s relevant to that question.

As the sale of assets, I think Paul answered earlier where he said he would expect that absolutely be on the table for us as well as the one steam vessel at GLOP, but that in his view, and I share his view, this is not – at this moment, this is not an opportune time to do it during the COVID disruption, but may emerge as an opportunity as we move forward. I agree with what he said on that.

Yes.

Okay, thank you.

Thanks, James.

Thank you, Jimmy, and thank you to everyone today for listening, for your continued interest in GasLog Limited and GasLog Partners. We certainly appreciate it.

We look forward to speaking to you next quarter. And in the meantime, if you have any questions, please contact the Investor Relations team.

Thank you very much.