Markets---Orders continue to trickle in

Oct 30 2015


MISC subsidiary, the Singapore-based tanker owner AET confirmed orders for eight tankers in two tranches this week in a deal said to be worth around $500 mill.

AET has contracted with Samsung Heavy Industries for four Aframaxes to be delivered in 2018. A further contract was with Hyundai Heavy Industries for two LR2s and two Suezmaxes, which will be delivered in 2017.

The two LR2s were ordered on the back of period timecharters to an undisclosed oil major.

The six other newbuilds will replace older tonnage in AET’s fleet, the company said.

On the signing of the contracts, AET board director Capt Rajalingam Subramaniam, said: “As a leading operator of petroleum tankers, it is important that our fleet remains young and agile so that we retain the capability to react to the evolving requirements of our customers. Part of that commitment is ensuring our new vessels are the best in class, providing a sustainable level of service to our customers.

“They incorporate a range of latest eco-innovations to help minimise the carbon footprint of AET and that of our customers. The MISC Group has previously contracted newbuilds from both Samsung and Hyundai and we are confident that both yards will deliver world-beating, state-of-the-art vessels for us,” he said.

Yee Yang Chien, president & group CEO of parent company MISC, added: “AET is a core part of MISC’s future business strategy and these two contracts demonstrates MISC’s commitment to ensuring our petroleum subsidiary remains at the forefront of its sector. We will continue to invest in AET to ensure it is underpinned with the assets it requires to deliver the highest quality ocean transportation solutions available in today’s market.”

In line with AET policy, the new vessels will be fitted with a range of latest eco-innovations to maximise fuel efficiency and their impact on the environment to enable them to be awarded the ‘green passport’ notation. They will also be fitted with IMO compliant ballast water management systems.

Meanwhile, New York-based Gener8 Maritime has agreed a $60.2 mill term loan facility with Citibank to fund part of the remaining instalment payments due on a VLCC newbuilding.

The VLCC, ‘Gener8 Strength’, was due to be delivered from Shanghai Waigaoqiao Shipbuilding in China on 15th October, the company said.

The loans under the facility will mature on 21st October, 2016. If certain extension conditions are satisfied on or prior to the one-year anniversary of the effective date of the facility, the maturity date will be extended to 21st October, 2020.

Under the agreement, the company is required to use reasonable efforts to obtain a credit facility with export credit insurance support from China Export and Credit Insurance Corp for the post-delivery financing of up to six newbuildings as soon as practicable and apply the proceeds from any credit facility to repay Citibank in full.

In other shipbuilding news, on 26th October, 2015, the keel laying ceremony for the lead ship of the 42,000 dwt Arctic shuttle tanker project ordered under Russian Maritime Register of Shipping (RS) class by Sovcomflot (SCF), was held at Samsung Heavy Industries.

All six ships in the series will be named after Russian Arctic explorers, including those involved in the Great Northern Expedition of the 18th century.

The ships are being built to dual RS/LR class. SCF will own three of the tankers and they will all ship crude oil from the Gulf of Ob area. The delivery of the first ship is planned for late June, 2016, while the last vessel will be delivered in 2017.

Turning to the charter markets, the pace of fixing VLCCs out of the MEG for November loading dates was slow last week. 

As a result, there is a very long list of tonnage adding pressure on rates, which fell sharply to about $50,000 per day for MEG/East voyages, down another $20,000 per day from the previous week, Fearnleys reported.

 

West Africa/East VLCC rates fell in tandem with the exception again being Caribbean/East, which seemed to be living a life at its own, although coming off the previous peak.

 

Activity in the MEG and West Africa is expected to increase, Fearnleys said, but it will take time to balance the oversupply of tonnage. Owners were still optimistic for the winter, though somewhat less than a month ago.

 

Rates for Suezmaxes moved sideways ex West Africa, as charterers were careful about presenting fresh business into the market. Some ships were fixed and failed only then to be absorbed into their own programmes.

 

There were still cargoes available ex West Africa for the remainder of the second week of November, which may lead to rates strengthening. In Black Sea/Med, rates firmed for early loading dates, mainly due to the delays in Turkish Straits and expectations for a heavy third week in this area.

 

The North Sea and Baltic Aframax market gained momentum last week and rates rose, mainly due to more activity in the Baltic for both crude and fuel oil. The tonnage situation was more balanced and owners used this opportunity to push rates up to WS100 level by the middle of this week.

 

In the Med/Black Sea, we also saw more momentum, mainly due to a tighter window in the Black Sea with limited tonnage available and increased Turkish straits delays. Charterers were in a rush to cover safe positions for their cargoes, which gave owners  stronger bargaining power and higher rates were evident, Fearnleys said.

Elsewhere, a second tanker was said to be heading for New York to operate as a floating storage vessel, as a result of US East Coast diesel inventories reaching an historic high last week.

The ‘Iris Victoria’, a Marshall Islands-flagged LR1, was believed to have been fixed for floating storage by Trafigura. The vessel was expected in New York last Friday from Sikka, India.

The Jones Act does not prohibit a foreign-flagged vessel from loading and discharging at a US port, as long as it's at the same terminal.

The Chinese-flagged ‘Hua Lin Wan’ was also thought being used for storage after recently arriving at New York in ballast.

Market sources told the newswire OPIS that it was unlikely that the ‘Iris Victoria’ charter would lead to similar demand for temporary storage of refined products in the US and that this may be a one-off.

Scorpio Tankers (STI) confirmed that it has entered into timecharter agreements with unrelated third parties for two of its ice class 1B MRs and one LR2.

The ice class 1B MRs (‘STI Notting Hill’ and ‘STI Westminster’) have been fixed for three years at $20,500 per day, with each charter scheduled to commence by December, 2015.

The LR2 ‘STI Rose’ was believed taken by Reliance for three years at $28,000 per day. She is scheduled to commence her charter during the first quarter of 2016.

Elsewhere, brokers reported that Shell had fixed the 2005-built VLCC ‘Seaking’ for two years at $43,000 per day.

The 2010-built Suezmax ‘Front Odin’ was reported fixed to unknown interests for two years at $34,000 per day, while the 1997-built Suezmax shuttle tanker ‘Scarlet Trader’ was taken by unknown interests for 12 months at $22,000 per day.

The 2011-built Aframax ‘Ligurian Sea’ was reportedly fixed to unknown interests for five years for $25,250 per day and the 1999-built LR2 ‘Torm Kristina’ was said to have been fixed to Petrobras for three years at $21,250 per day.

The 2009-built MR ‘Adamas 1’ was believed fixed to Trafigura for 12 months at $18,000 per day, while the US Military Sealift Command was thought to have fixed the 2006-built MR ‘Torm Platte’ for three months at $19,500 per day.

In the S&P sector, Bahri was said to have purchased two 2010-built VLCCs, ‘Blue Topaz’ and ‘Blue Pearl’, for $78 mill each.

Nordic American Tankers (NAT) said that it had taken delivery of the second of two 2010-built Suezmaxes bought for $122 mill in July.

The first, ‘Nordic Light’, was delivered on 22nd September, while the second joined NAT’s fleet on 29th October and has been renamed ‘Nordic Cross’.

The two 2006-built Aframaxes ‘Minerva Atlantica’ and ‘Minerva Antarctica’ were believed to have been sold to Premuda for $28 mill each. This deal includes a five-year bareboat charter back to the owners at $11,500 per day. 

Singapore-based FSL Trust Management (FSLTM) has bought an MR for $21.8 mill, as part of its fleet renewal programme.

The 2007-built, 45,998 dwt tanker is scheduled for delivery between 1st November, 2015 and 31st January, 2016 and is intended for employment in the spot market through a commercial manager.

The vessel will be financed through FSLTM's existing cash reserves amounting to around 41.8 mill, as of 30th June 2015, the company said.

Another MR, the 2000-built ‘Mahanadi Spirit’ was thought committed to Chinese interests for $11.5 mill. She was thought to have a special survey drydocking due next month, while the 2007-built MR ‘Seven Express’ was believed to have been sold to Chinese buyers, said to be Rui Hui, for $22 mill.

Leaving the fleet was the 1986-built parcel tanker ‘Bow Victor’ reported sold to Indian breakers for $450 per ldt. The high price was thought due to the vessel being fitted with 1,280 tonnes of stainless steel. 



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