Wilbur Ross consolidates control of LNG shipper Navigator

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Wilbur Ross, billionaire investor and distressed asset specialist, is known to be bullish on natural gas. He considers gas to be one of the cheapest fossil fuels and the least non-polluting. The sustained fall in natural gas prices following the glut in production from shale assets has only bolstered his prediction that natural gas will soon find its way into many other applications for the common man. Read his recent interview on the topic here.

Wilbur Ross consolidates control of LNG shipper Navigator

Ross has also made a major investment in Exco Resources Inc (NYSE:XCO) which is an exploration company with shale gas assets. Ross sees great opportunity for U.S. natural gas to become a valuable export and to take a bigger portion of the country’s energy supply. “Natural gas doesn’t give cancer, it’s a very useful product, very cheap per Btu — much less than oil, and is less pollutive than oil or coal,” he says. Ross has been named to the Exco Resources Inc (NYSE:XCO) board.

The potential for cheap natural gas to reach other parts of the world is what may have driven Ross to buy an additional stake in gas shipping company Navigator Holdings Ltd (PINK:NVIGF) for $110 million from bankruptcy trustee James Giddens who is liquidating Lehman Brothers Holdings’ brokerage business.

With this purchase, Ross will have effective control of 56% of  Navigator Holdings Ltd (PINK:NVIGF) stock. Though Navigator has a poison pill provision, the same has been waived for the block sold by the liquidator to Ross.

Ross justifies his purchase by saying, “It’s a very interesting, niche market that they’re in. What they carry is liquefied natural gas, ethylene and ammonia to shallow harbors in many developing countries, such as Indonesia, China and Venezuela.”

He further says, “They are the leaders in that segment. We believe that segment over time will grow because us of all the shale gas found in the U.S.” Navigator has around a 15% market share in the handy sized LPG sector, and runs a fleet of 14 semi-refrigerated gas carriers.

As usual, his wisdom is probably right.

In a separate development today, Golar LNG Limited (NASDAQ:GLNG), a company controlled by shipping billionaire John Fredriksen, said it received a record rate to store liquefied natural gas on one of its carriers in the Persian Gulf. The vessel will earn a record $185,000 a day from the booking, the highest ever. According to HSBC Shipping Services LNG carrier rates were as low as $20,000 a day in 2010. Shares of Golar LNG Limited (NASDAQ:GLNG) have risen 45 percent in the last year, and currently trade at $40.26.


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