Norway’s Fredriksen Group has canned potential orders for up to eight VLCCs with two Chinese shipyards amid intense market talk that the party is homing in on 10 dual-fuel VLCC newbuildings in South Korea.
John Fredriksen’s interests penned letters of intent (LOIs)with both Dalian Shipbuilding Industry Corp and Shanghai Waigaoqiao Shipbuilding, both for two firm vessels with two optional slots.
But the LOIs have been dropped at both yards.
Instead, market players were gripped with reports that Fredriksen interests were close to confirming a deal for 10 VLCCs at Hyundai Heavy Industries.
However, the group described the reports as pure rumour.
Market talk was heightened by the suggestion Fredriksen is in talks with HHI for dual-fuelled VLCC newbuildings, which would come with a higher price tag of upwards of $10m plus per ship.
Well-tested designs
But brokers who know the owner well suggested it is unlikely that he has chosen this solution and would be more likely to select conventional and well-tested designs.
Standard VLCC newbuildings at South Korean yards currently are priced in the region of $95m apiece, although Fredriksen would likely be in the running for a discount with a 10-ship order.
Fredriksen’s Frontline last month confirmed a purchase of a resale VLCC at Hyundai Samho Heavy Industries.
This newbuilding, which will be delivered in May 2020 is scrubber-fitted and will cost $92.5m.
There has been talk Fredriksen also might seek to buy the fleet of Oslo-listed VLCC owner Hunter Group, which has eight VLCCs on order at DSME with scrubbers.
Frontline Management chief executive Robert Hvide Macleod has said that the company is seeking new possibilities to secure growth for the company. He expects prospects for the tanker market will be the best in years at the start of 2020.
