Owners with pre-steel price-rise options could be in a competitive position
Norway’s Equinor has received a wide range of offers from shipowners for a raft of dual-fuelled aframax and LR2 tanker newbuildings, with some priced at 15% to 20% above recently concluded vessel deals due to the recent hike in steel prices.
Brokers said bids on the high-specification vessels have been offered at prices ranging from levels in the high $60m to mid-$80m range.
Time-charter rates are said to extend from the high-$20,000-per-day range upwards to levels just below the $40,000-per-day mark.
The extended range is understood to be largely due to the jump in steel-plate price rises experienced by Chinese and South Korean yards during May, forcing shipbuilders to bump up their quotations in response.
In April, energy company Equinor requested offers on up to four aframax tankers and three LR2 dual-fuelled newbuildings capable of bunkering LNG.
The company offered five-year charters with five one-year optional hire periods on the 109,000-dwt and 115,000-dwt vessels, and asked for delivery dates in 2023 or the first half of 2024.
Equinor has asked for a bid validity on the offers up to 23 June. There is speculation that the company may move to a shortlist on the business.
One shipowner following the tender commented that owners with existing options at yards — or who had early indications of Equinor’s requirements — are likely to have been able to offer ships costing closer to $60m and will have been able to make significantly more competitive offers.
An experienced newbuilding broker identified BW-controlled Hafnia as among those who have unfixed newbuilding options.
In addition, he named energy major Shell as being long on its LR2 dual-fuelled tanker newbuildings and indicated the company has been looking at reletting these ships to Equinor.
But he pointed out that, technically, these vessels — fitted with low-pressure X-DF propulsion system with higher levels of methane slip — are non-compliant with Equinor’s tender that specified high-pressure ME-GI engines for the vessels.
Gunvor’s Clearlake Shipping is also rumoured to have offered LNG-fuelled vessels it has on charter from Eastern Pacific Shipping.
Technology ‘wish list’
Several market observers commented that on top of the challenges posed by the steel-plate price rise, shipbuilders are unlikely to want to build low-margin tanker tonnage when they could fill their berths with high earning containership newbuildings.
Equinor’s high specifications for the ships — described in one broking report as “an environmental wish list of current technology” — is also expected to have pushed quotes towards the top end.
There has been speculation among market players that Equinor might cancel the process on the back of the high-priced offers. But others said the company is likely to get support from Norwegian interests to move the business forward.
Equinor, which is targeting a 50% reduction of shipping emissions by 2030 compared with 2005, already has four LNG-fuelled shuttle tankers on charter, two each from AET Tankers and Altera Infrastructure — previously known as Teekay Offshore Partners.
The energy company is said to be seeking these latest vessels in its tender to replace a series of conventionally-fuelled tankers it took on five to six-year charters from 2015 onwards at rates of around $23,000 per day.