John Fredriksen’s Avance Gas is keeping one of its new dual-fuel VLGCs on time charter for another year.
The Oslo-listed owner has signed a one-year extension to a two-year variable-rate deal for the 91,000-dwt Avance Polaris (built 2022) with an energy major named by brokers as France’s TotalEnergies.
The vessel has been operating for the oil and gas company since delivery. The extension will take the Avance Polaris up to February 2025.
Chief executive Oystein Kalleklev said the rate will depend on spot market levels.
Spot freight rates for VLGCs heading from the Middle East Gulf to Asia were assessed by the Baltic Exchange at $36,700 per day on Tuesday, up 174% in a month.
“We are obtaining economic benefits from the fact that the ship has considerably lower average freight costs than a traditional VLGC,” Kalleklev added.
“This is due to the fact that the vessel has approximately 10% higher cargo intake, 10-15% per cent lower fuel consumption and is equipped to burn LPG, which is considerably cheaper in most cases than compliant fuel,” he explained.
This is also better in terms of carbon emissions, a fact also now financially rewarded if carriers call at EU ports, due to the Emissions Trading Scheme, Kalleklev added.
The vessel is one of six LPG-capable VLGCs built by Daewoo Shipbuilding & Marine Engineering (now Hanwha Ocean) in South Korea up to 2023.
The second in the series was fixed to UK-based owner and operator Petredec.
