South Korean shipping line Pan Ocean signed long-term charter agreements with Galp and Shell worth US$421M for LNG newbuildings ordered from Samsung Heavy Industries (SHI) and Hyundai Heavy Industries (HHI)
The Korea Herald reported that Pan Ocean signed an order worth US$183M with SHI, with delivery of the vessel set for April 2023 – part of an ambitious expansion of the South Korean shipping line’s LNG carrier fleet.
This newbuilding is expected to go on long-term charter with Portuguese energy major Galp and strengthens the South Korean shipowner’s intention to expand its LNG shipping portfolio. Pan Ocean entered into a time charter contract for one LNG carrier with Galp Energia on 30 December for an estimated US$115M. The five-year contract will start February 2023, with two Galp options that could extend the charter to 11 years.
The owner of one 2008-built very large gas carrier, Pan Ocean reportedly placed LNG carrier orders in mid-December with HHI. Pan Ocean entered into a long-term time charter contract for two LNG carriers with Shell Tankers Singapore Private Limited on 15 December for an estimated US$306M. The seven-year contract will start from September 2024, with options that could extend the charter to 13 years.
Overall, the Anglo-Dutch energy major has chartered 22 LNG newbuildings “with more to come,” according to BRL Weekly Newbuilding.
“We recently recorded four very large gas carriers for undisclosed account with Shell employment,” reported BRL. “Two of these have been confirmed for ownership of Pan Ocean Co, South Korea and marks their debut with commitments from Shell. The former intends to break into LNG in a big way.”
Most of the charters for the newbuildings have been secured at a rate of US$60,000 a day over seven-year periods, with options for extensions. “Brokers consider these to be very low rates but permanent employment is procured by the shipowners,” said BRL, adding that all of Shell LNG vessels “are aimed at the lowest emissions status and likely to operate on WinGD dual-fuel propulsion.”
Seven LNG carrier newbuilds have been chartered by Shell from Norway’s Knutsen Group, the most recent one ordered from Hyundai Samho Heavy Industries. BRL believes Pan Ocean has attached at least one option to their order but is awaiting confirmation.
The recent orders for South Korean shipbuilders are welcome news even as HHI and Daewoo Shipbuilding and Marine Engineering have received the green light from Chinese regulators to move forward with their merger.
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