The DiaNor strategic partnership between Diamond S Shipping and Norden will create one of the largest centralised MR product tanker fleets
Diamond S Shipping Inc has announced a strategic partnership with Norden A/S to form DiaNor, to facilitate the commercial consolidation of two of the world’s largest owner/operators of product tankers. Diamond S will initially contribute 28 medium range (MR2) product tankers to the endeavour, which will be marketed and operated through the Norient Product Pool (NPP).
Diamond S also intends to contribute its inhouse commercial expertise in the product tanker space to the global network of NPP. With the contribution of DiaNor ships, the Norient Product Pool will manage approximately 150 tankers and become one of the largest operators of MR product tankers in the world.
Diamond S chief executive and president Craig Stevenson Jr commented, “We are pleased to further continue the much needed consolidation of the tanker industry. The
DiaNor partnership is an exciting new chapter for Diamond S. We believe it will create substantial value for both our shareholders and our customers. We have worked with Norden and NPP in the past and believe they represent a state-of-the-art, world-class commercial organisation. Adding our considerable capabilities to their extensive network should produce a clear leader in the product tanker space.”
Norden chief executive Jan Rindbo said of the partnership, “We are delighted to enter this partnership with Diamond S, which will further strengthen our ability to provide efficient global transport solutions to our product tanker customers. Diamond S has been a valued partner of Norden in the past and we look forward to what we can create together in the future.”
DiaNor enables Diamond S and Norden to develop a homogeneous fleet and create scale, expediting further development of the digital solutions already in play in both organisations as well as optimisation including fuel efficiency, bunker purchasing, and vendor contracts around the world. In 2018, Diamond S Shipping merged 43 tankers with the 25 product and crude oil tankers of Capital Product Partners to created what was then the second-largest handy tanker fleet.
“We are convinced that the scale created by the combined fleets as well as the people competencies will create great value to our stakeholders,” says Norden head of tanker operations Søren Huscher. “The strong values upon which we are both built will be the backbone of our joint efforts.”
The management of the combined fleet of around 90 MR2 product tankers will be handled from Norden’s offices in the US, Singapore and Denmark and become one of the largest within the segment.
Jefferies Equity Research analyst Randy Giveans wrote in a research note on the creation of the strategic partnership that Norden has consistently outperformed the MR benchmark indices, while Diamond S Shipping has underperformed. The research note also reported that the product tanker fleet as a whole stood to benefit from the unwinding of lockdowns around the world.
The biggest fully-fledged product tanker merger to date was that of BW Tankers and Hafnia. In a recent press release, Hafnia also pointed to the release of lockdowns are a source of increasing product tanker demand, “Hafnia sees slightly positive market signals pointing towards a better recovery than expected by most, with airlines, businesses and critical infrastructure opening up again faster than anticipated in many parts of the world.”
The product tanker operator and pool operator Hafnia also teased there was more news to come from the product tanker sector, “Riding the wave of collaboration and consolidation, Hafnia will soon enter a new product tanker segment with industry peers, established under the name of ’Hafnia Specialized’. This business will handle tonnage below 25,000 dwt. We look forward to disclosing more precise information in the weeks to come.”
Find out more when Hafnia chief executive Mikael Skov joins the Tanker Shipping Leaders webinar on 26 June 2020.