John Fredriksen’s Frontline 2012 announced Monday that the company has placed an order for two VLGC’s marking the recently spun off tanker company’s entrance into the seemingly promising LPG market.
In a statement to reporters, Frontline 2012 says that it has finalized the newbuilding contract with an unidentified Chinese shipbuilder calling for the construction of two 83,000 CBM LPG tankers for a total of $127 million. The contract also includes the fixed price option for an additional four vessels worth a potential $254 million.
“We are excited about the prospect for Frontline 2012 to develop a profitable business within the LPG market,” said Fredriksen. “The high growth in LPG production, combined with a low newbuilding orderbook and historic low new building prices for fuel-efficient tonnage creates a unique opportunity to enter this market. We are hopeful that Frontline 2012 within three years can be one of the major players in this market.”
The announcement expands Frontline 2012’s activities to include the commodity shipping segments crude, product and LPG.
“Frontline 2012 is currently in discussions regarding a further increase of the new-building programme and will continue to pursue its target within three years to create the global leading commodity shipping company,” the company added.
Frontline 2012 was spun off from the Bermuda-based Frontline Ltd. in February after massive amounts of debt and a costly newbuild program threatened the survival of the once-largest crude tanker company.