Shell charters-in 10 LNG dual-fuel VLCCs

In December 2020, shipping consultant BRL revealed that 10 VLCCs with dual-fuel LNG power had been ordered at DSME. The VLCCs had been ordered against a long-term charter to energy major Shell, which is transiting from oil major to energy major.

It has now been revealed that Swiss-based Advantage Tankers will charter four of the VLCCs to Shell. Advantage Tankers is controlled by Nazli Williams and currently has a fleet of 17 tankers including two VLCCs.

Three of the 10 VLCCs have been long-term chartered to Shell by AET, the energy logistics and tanker operating arm of the Malaysian state-owned energy group MISC Berhad. AET has a fleet of 57 tankers, including eight VLCCs in the water. It has a proven track record in ordering and operating innovative tankers.

AET is due to take delivery of the two LNG dual-fuel VLCCs from Samsung in South Korea in Q2 2022. These were ordered against a long-term charter to Total.

The third tranche of the 10 VLCCs consists of three VLCCs to be owned and operated by US International Seaways, run by Lois Zabrocky. International Seaways has a live tanker fleet of 31 vessels, including 11 VLCCs.

The specification of the 10 Shell-chartered tankers is reported to include deck-mounted LNG tanks. The LNG fuelling system is said to add US$15M and the reported total price per VLCC is US$100M.

In addition to the two AET LNG dual-fuel VLCCs ordered against the Total contract, and the 10 Shell chartered LNG dual-fuel VLCCs, COSCO Shipping Energy Transportation of China is reported to be paying an additional US$6M for one of its VLCCs on order at Dalian Shipbuilding to be re-specified with LNG dual-power.

This brings the orderbook of known LNG-capable VLCCs to 13 vessels.

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