Odfjell Places Order for New LPG Carriers

The OSM-managed LPG tanker Bow Gallant is one of two LPG tankers owned by Odfjell, image: OSM

Nantong Sinopacific Offshore & Engineering Co. has been awarded a USD $180 million contract from Odfjell for the construction of four 17,000 cbm LPG/Ethylene gas carriers with options for an additional four ships.

Deliveries are scheduled between October 2015 and May 2016 according to a statement on Odfjell’s website. These ships will add to Odfjell’s current fleet of two 9,000 cbm LPG/Ethylene carriers.

Chemical tankers

Besides looking to grow their LPG shipping division, Odfjell currently operates 88 clean product tankers with four 46,000 dwt ‘eco-design’ IMO ii chemical tankers under construction at Hyundai Mipo Dockyard (HMD) in Ulsan, South Korea. The keels of these first two vessels were laid on 21 August and the ships will be delivered in January and February 2014. Subsequent ships will be delivered in May and July 2014.

CFO Terje Iversen comments in his company’s 2nd quarter magazine that “we experienced steady nomination of contract cargoes and improved spot rates.” Odfjell’s time charter results were up 8% compared with the first quarter of 2013. “Chinese growth is at a somewhat lower level than expected, and is poised for the weakest expansion since 1990. Key Euro zone statistics have favourably surprised the markets in the past quarter. The development of the US shale gas industry is providing cheaper energy and feedstock for the US chemical industry.

Based on the above macro-economic picture and the fact that there are no material changes to the supply/demand situation, we believe that the next 12 to 24 months will see an improvement in our segments. However, given the continued underperforming overall global economic growth, combined with the ‘supply overhang’ of ships we only expect the second half results of 2013 to be moderately better than the previous two quarters.”