Shell Nears Deal for 10 New MR Tankers with Chinese Shipyard

Energy giant Shell is reportedly close to finalizing a major newbuilding deal for 10 MR2 tankers with Guangzhou Shipyard International, a subsidiary of the China State Shipbuilding Corporation (CSSC) Group. The estimated value of the order is around USD 500 million, with each vessel costing approximately USD 48 million. Deliveries are projected between 2027 and 2028.

Letter of Intent Signed, Deal Yet to Be Finalized

Although multiple shipbroking sources have confirmed the potential deal, the agreement has not been fully finalized. A Letter of Intent (LOI) has been signed between Shell and the shipyard, but no official contract has been executed yet. Shell, which currently manages a fleet of 28 vessels, including LNG carriers and oil/chemical tankers, has not commented on the transaction.

Historical Significance for Shell’s Fleet

Shell has a long history in the shipping industry, having launched its first oil tanker, the Murex, in 1892. In 2018, the company celebrated the legacy by introducing the fifth Murex vessel, part of a new generation of LNG carriers.

Rising Demand for MR2 Tankers

MR2 tankers, popular among shipowners for their versatility in transporting oil and chemicals, are experiencing growing demand. According to data from Xclusiv Shipbrokers, the MR2 orderbook-to-fleet ratio reached 17.3% by the end of September 2023, up from 15.9% a month earlier. Currently, the global MR2 fleet consists of 1,762 vessels with a total capacity of 86.3 million dwt, while 300 new MR2 tankers with a capacity of 14.95 million dwt are on order, scheduled to join the fleet starting in 2026.

Fleet Renewal and Industry Trends

The renewal of the MR2 tanker fleet is becoming increasingly necessary, as many vessels are aging. Approximately 24.7% of the MR2 fleet is between 15 and 20 years old, with another 24.3% falling within the 11-15 year range. The new order of MR2 tankers is expected to help modernize the fleet, addressing the needs of the evolving tanker market.