Euronav has entered into an agreement with Hyundai Samho for two LNG-ready VLCCs
The newbuilding contracts are the sharp end of Euronav’s strategy to be at the forefront of innovation in the energy transition to decarbonise the transportation of crude oil. Euronav is already working with the yard and classification society to include an ammonia-ready notation with the potential to reduce CO2 emissions to zero when technology, logistics and the regulatory framework allows for it. This should be defined by mid-year.
Euronav already has an ammonia-power-prepared Suezmax tanker under construction.
In addition to being significantly more fuel efficient compared to the vessels they will replace, the newbuildings will be fitted with exhaust gas scrubber technology and ballast water treatment systems.
These market-leading units will be delivered during Q4 2022 and Q1 2023, costing US$186M en-bloc, and including US$4.2M in additions and upgrades to the standard specifications. Euronav has the option to contract a third VLCC with the same specifications that would be delivered in Q2 2023.
Euronav stated that while contracting and orderbook-to-fleet ratio remains at an historical low in the tanker segment, elevated contracting activity from other segments has reduced available capacity to build VLCCs at a time when the sector needs to replace maturing vessels with more environmentally friendly designs.
Euronav chief executive Hugo De Stoop said “As a market leader in our segment, Euronav acknowledges our responsibility to support innovation towards decarbonising the transportation of oil, while protecting and building value with the capital our shareholders have entrusted us with. With this order, Euronav is tangibly driving innovation and investing in the energy transition.”
He added “These ships are not only the latest generation of low consumption design but also have the option to be converted or retrofitted to use either LNG or ammonia as a low-emissions fuel of the future. As there are no such alternatives in the secondhand market today, and with rising steel prices and constraints over yard capacity to 2024, we wanted to seize this opportunity to rejuvenate the fleet with two or three modern VLCCs that will replace older and less efficient ships that will leave our fleet around the same time of their delivery”.
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