Timed To Perfection: Triple VLCC Delivery Arrives As Market Climbs


US-listed International Seaways takes delivery of a trio of LNG-dual fuelled VLCCs, just as the sector appears to be entering a boom phase, reports Riviera.


International Seaways took delivery of two of three newbuild, dual-fuel (LNG) VLCCs in March and April 2023, with a third due later in the year.

Seaways Excelsior and Seaways Endeavour are beneficially owned by China’s Bank of Communications and the vessels leased to Seaways International, which is the commercial manager. The technical manager of the three new VLCCs is V.Ships.

So far in 2023, 14 VLCCs have been delivered, with another 10 scheduled for delivery in 2023. This is far fewer than the 42 VLCCs delivered in 2022. The expected number of VLCCs to hit the water in 2023 will be the lowest since 2015 (20 VLCCs, according to VesselsValue).

But 2023 will be seen as a year of excess compared to 2024, when only one VLCC is due to be delivered. Even if there was a sudden downturn in freight and charter rates and owners sought to delay taking delivery of the 2023 additions, it is unlikely that 2024 deliveries would reach double figures.

A short list

Which means that any charterer looking to take a new VLCC for short-term employment in 2024 is going to be faced with a very short list, while supply and demand dictates the rates will be high and subsequent earnings very firm.

The arrival of the dual-fuel (LNG) VLCCs into the International Seaways fleet is no accident, according to senior management. International Seaways’ president and CEO Lois K Zabrocky said: “Seaways has successfully invested at low points in the cycle, including when we partnered with an oil major in 2021 to build three dual-fuel LNG VLCCs at prices over 35% below current values. We are pleased to have taken delivery of the first two vessels and expect the remaining vessel to join the fleet later this quarter.”

Ms Zabrocky added: “At a time when we expect positive fundamentals to continue to drive strong tanker earnings, we are poised to benefit from their attractive charter rates, with added upside due to profit sharing above the base rate. While we are monitoring the impacts of recessionary pressures on oil demand in the near term, we are confident that higher tanker utilisation from the shifting global energy trade, combined with the lowest orderbook in more than 30 years, will underpin a robust market during 2023.”

Maximising the financial opportunity to take advantage of the tanker utilisation required a careful financial strategy. Seaways International’s CFO Jeffrey Pribor said: “We pulled every possible lever in a capital allocation strategy: we invested in the fleet with the deliveries from our newbuilding program. Together with our operating leverage and strong financial position, Seaways is ideally positioned to continue building our track record as good stewards of capital.”

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Source: Riviera


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