Belgian shipowner Exmar is turning to a Chinese shipyard to replace a collapsed order for VLGC newbuildings at Hanjin Heavy Industries & Construction Philippines (HHIC-Phil).
Industry sources said Brussels-listed Exmar is poised to commission Shanghai-based Jiangnan Shipyard to construct a pair of 86,000-cbm gas carrier newbuildings — and the vessels’ main engines will be capable of using LPG as fuel.
“The two companies are meeting this month to iron out the final details for the newbuildings,” a shipbuilding source said. “Signing of the contract would be taking place imminently.”
One gas market source said there is talk in the market that Exmar will be paying between $73m and $74m per ship. Delivery dates have not been disclosed, but many shipbuilding players expect Jiangnan to request at least 24 months to construct the vessels.
Replacement vessels
The two VLGC newbuildings are replacements for slightly smaller ships that Exmar ordered at HHIC-Phil in late 2017. The shipowner terminated the contract at the Subic Bay facility after the financially-troubled shipyard defaulted on $400m-worth of loans and filed for rehabilitation earlier this year. Shipyard workers were sent home and work on contracts was suspended amid the proceedings.
At the time Exmar ordered the pair at HHIC-Phil, the 80,200-cbm vessels were poised to become the first large LPG carriers to be ordered with main engines capable of using LPG as fuel. They were also the first VLGC orders for the South Korean-owned shipyard. Exmar was reported to be paying a price of $70m per ship and was supposed to take delivery of them in 2020.
Price gap problems
Shipbuilding sources said Exmar had also approached Hyundai Heavy Industries to build the LPG-fuelled VLGC newbuildings, but it dropped out of discussions due to the huge price gap between the two companies.
Exmar, which declined to comment for this story, is ordering the VLGCs against charters to Norway’s Equinor. There has been no word as to whether changes have been made to that contract in connection with the termination of the original order.
Officials at Jiangnan were not available for comment before TradeWinds went to press.
Trond Lillestolen contributed to this story
