News bulletin – tanker shipping

NEWS BULLETIN

TANKER SHIPPING

DORIAN ON THE UP

Dorian LPG has reported revenues of $73.2m for its first fiscal quarter to end June 2020, up from $61.2m a year ago, with average timecharter equivalent rates for its very large gas carriers (VLGCs) up by 39 per cent at $41,249/day. Adjusted net income came in at $12.7m, slightly up on last year’s $12.1m.

“I am grateful to our seagoing and shore staff for their contribution in achieving a good financial result for this quarter during which the company faced challenges particularly relating to crew movements and the drop of the Baltic [Index] from [$50/tonne] at the beginning of April to [$30/tonne] at the end of June,” says John C Hadjipateras, chairman, president and CEO. “The market has since recovered to over 60 and I believe the company is strongly positioned as global conditions begin to normalise.”

Dorian LPG reports that global seaborne LPG liftings during the April-June period amounted to 26.8m tonnes, down 2.7 per cent on the year-earlier figure, though liftings for the first six months were slightly ahead. US exports were 5.2 per cent higher in the second quarter, while Middle East exports dropped by 8.1 per cent on the back of oil production cuts.

“A return to more favourable commodity price relationships, the ongoing increase in secular demand for LPG as a more environmentally friendly alternative to other forms of energy and forecasted high levels of US exports as evidenced by export capacity and pipeline investments are expected to provide long-term support for VLGC demand,” Dorian LPG says. www.dorianlpg.com

SHORT-TERM BOOST FOR EPIC

Epic Gas, a leading player in the fully pressurised LPG tanker sector, has reported second quarter revenues of $45.9m, up 13 per cent year on year, with EBITDA jumping 73 per cent to $16.6m and net income swinging from a loss of $1.6m to a profit of $4.5m. The results reflect a larger fleet and also reduced operating costs, due in no small part to the inability to perform crew transfers during Covid-19 lockdown conditions.

Those benefits are likely to be short-lived, though. Epic Gas expects growth in seaborne LPG trade for the year as a whole to be around 0.8 per cent, well down on earlier expectations of a 5.0 per cent growth and also below the projected 1.5 per cent growth in the pressurised fleet.

“Operational challenges caused by Covid-19 are escalating and include an inability to fully deploy and repatriate crew, delays to spares and dry docking, and quarantine issues in some ports,” says CEO Charles Maltby. “Despite our strenuous efforts, we expect these challenges to remain with us for the rest of the year, and to lead to increasing [operating] costs. We fully endorse the work of international organisations and industry bodies to unlock the global log jam on safe crew transfers and are grateful to our seafarers for their forbearance.

“We observe the increasing industrial activity in some economies, and our core customers in the residential LPG markets are in the most resilient sector of the LPG market,” Maltby continues. “However, this is likely not sufficient to continue the positive market momentum, especially for the smaller vessels. We remain opportunistically focused on the fine tuning of our asset base and costs, with our fleet being supplemented by the addition of a modern 7,500 m3 vessel later this year.” www.epic-gas.com

MISC, SATELLITE PAIR UP IN ETHANE

Zhejiang Satellite Petrochemical has secured a sale and charter-back agreement with MISC for the six 98,000-m3 very large ethane carriers (VLECs) it has on order at Hyundai Heavy Industries and Samsung Heavy Industries. MISC says it will pay some $726m for the vessels, which will be timechartered to Satellite Petrochemical for 15 years through MISC’s Singapore-based subsidiary Portovenere & Lerici. Delivery of the new ships is due to start in the fourth quarter of this year.

Zhejiang Satellite Petrochemical, the largest acrylic acid producer in China, is reported to be looking to double its newbuilding order. Indeed, when the original contracts were placed, it said that this was the first phase of a project that foresaw the use of Chinese yards to build further vessels. Local sources suggest these too will be passed on to an operator and chartered back.

The new ships, the largest ethane carriers yet built, will be used to carry ethane from the US to Satellite’s new ethylene cracker in Lianyungang, due to open later this year. Brokers report that the first of the six has been launched and named Chang Xiu. www.satlpec.com www.misc.com.my

KOSAN ALONE

J Lauritzen has completed the separation of its two businesses into independent companies, Lauritzen Kosan A/S, which operates LPG tankers, and Lauritzen Bulkers A/S. Long-term financing has been arranged for both. Thomas Wøidemann has been appointed CEO of Lauritzen Kosan and will report to a newly constituted board.

“We now have a clear and durable structure, where each of the two businesses can use their strong market presence to compete efficiently and grow in their respective segments,” says Tommy Thomsen, chairman of J Lauritzen.

Having seen the deal through, current group CEO Mads P Zacho will leave the company. “As owners of both Lauritzen Kosan and Lauritzen Bulkers we are pleased to see these plans fall into place and we give thanks to Mads Peter Zacho for leading this strategy to completion,” Thomsen adds. www.j-l.com

ARDMORE KNOCKS BACK HAFNIA

Ardmore Shipping has declined an unsolicited acquisition proposal from Hafnia Ltd, saying that the all-stock offer “was highly opportunistic, substantially undervalued Ardmore and its future prospects, and did not constitute a basis for engaging in discussions with Hafnia”.

In response, Hafnia described itself “disappointed” by Ardmore’s response and said it continued to believe that combining the two product/chemical tanker fleets would be in the best interests of Ardmore shareholders. “We believe that large and well-capitalised shipping companies can be more cost-competitive in operations and financing, better equipped to make the necessary environmental investments to meet new regulations, and better able to provide public shareholders with scale and liquidity,” it stated.

Hafnia says it remains open to further discussion. ardmoreshipping.com hafniabw.com

ODFJELL’S FLEET RENEWAL

The last phase of Odfjell’s current fleet renewal programme has begun, with the recent launch of Bow Explorer, the first of two 38,000-dwt stainless steel chemical tankers building at Hudong Zhonghua. The new ships are smaller than the previous 49,000-dwt vessels built at the yard but have more tanks; their 40 cargo tanks in Duplex 2205 will add flexibility in deployment and offer customers more options. Odfjell notes that delivery dates at Hudong have slipped somewhat as a result of the Covid-19 crisis and its impact on working schedules but that construction has started and delays will only be minor.

Odfjell has also taken delivery of the 36,000-dwt chemical tanker Bow Persistent from Fukuoka shipyard in Japan, under bareboat charter from Taihei. Like its sistership Bow Prosper, the new tanker is designed specifically for the carriage of propylene oxide and has thermal oil heating capacity. This completes the current newbuilding programme at Fukuoka. Further ahead, Odfjell has two 25,700-dwt stainless steel chemical tankers booked at Asakawa for 2022 delivery. www.odfjell.com