John Fredriksen’s Avance Gas is doubling down on its entry into the smaller LPG/ammonia sector by declaring newbuilding options in China.
The Oslo-listed VLGC specialist said it has added two 40,000-cbm carriers to its June order for two sister ships.
The latest mid-sized (MGC) units from Nantong CIMC Sinopacific Offshore & Engineering are due in the second and fourth quarters of 2026.
They will run on LPG as well as compliant fuel oil.
The owner is paying $61.5m per ship, or $123m in total, a price it views as very favourable compared to recent similar orders.
The company said it had decided to take advantage of the attractive price before the options lapsed.
Chief executive Oystein Kalleklev added the deal broadens its product offering while renewing the fleet.
“These ships are not only perfect for the LPG trade but also ammonia trade as parcel sizes for ammonia cargoes tend to be in this size lot,” he said.
Kalleklev added: “Given the high expected growth of the ammonia trade, the four new MGCs are a very attractive addition to our fleet, where we already have two VLGCs on the water which are ammonia-ready in terms of running it as fuel, while the two VLGCs for delivery next year can both carry and burn ammonia.”
He pointed to the substantial cash balance of $220m at the end of the first quarter, the recent sale of a VLGC for $60m and the strong freight market as reasons why the company can fully finance the vessels without affecting dividends.
The CEO promised more on this subject in its financial results at the end of August.
The new vessels will be equipped with shaft generators to further improve operational and maintenance costs, while boosting the environmental profile.
Avance Gas has 14 VLGCs, with two more on order at Hanwha Ocean in South Korea.
