Mitsui OSK Lines plans to renegotiate the charter contracts with Russian entities on three LNG carriers and one condensate vessel worth a total of ¥105bn ($689m) in the face of Western sanctions.
But the Japanese shipowner said it may seek to sell the vessels if these discussions fail, potentially incurring losses on its original investments in them.
MOL said on Thursday: “In light of the strengthening of sanctions from the US and Europe, we need to modify the contract schemes of the charter contract of the three LNG carriers and one condensate tanker with ice-breaking capabilities … which is part of our Russia-related business, and have started negotiation with the relevant parties.”
The company said that if the negotiations encounter difficulties, it might be unable to perform these charter agreements.
“In the event that the charter agreements are discontinued, we will seek to sell the vessels to third parties. However, due to the difficulty of converting them for use in other businesses, as they have ice-breaking capabilities, it may be challenging to achieve sale prices we intend.”
MOL said this might incur losses on its original investment. It did not name the ships concerned.
Today, it emerged that South Korean shipbuilder Hanwha Ocean is delaying the delivery of four LNG carrier newbuildings by five months into 2025.
It said the vessels were due for handover by 31 October 2024, but the contract date end has now been changed to 10 March 2025.
Hanwha Ocean said it originally gave details of the contract for the ultra-large LNG carriers on 14 September 2021 and said the order was signed with an Asia-based shipowner.
Clarksons’ Shipping Intelligence Network shows that MOL booked four LNG carriers at Hanwha Ocean — then called Daewoo Shipbuilding & Marine Engineering — on 13 September 2021 for Novatek Asia, a subsidiary of the Russian energy company.
The 174,000-cbm vessels are listed as the on-order North Light, North Moon, North Ocean and North Valley.
MOL has been battling with the ships it ordered for Russian charters before the invasion of Ukraine in February 2022.
Sweeping sanctions against Russian entities, persons and ships have forced contractors and suppliers away from handling anything related to the construction of the vessels.
MOL is also building a 172,600-cbm trio of ice-breaking Arc7 LNG carriers at Hanwha Ocean — the Ilya Mechnikov, Nikolay Semenov and Nikolay Basov.
These specialised ships, along with three others originally contracted by Russian owner Sovcomflot but now taken over by the shipyard, were due to serve Russia’s Arctic LNG 2 plant.
The three former Sovcomflot newbuildings — the as-yet-undelivered Pyotr Kapitsa, Lev Landau and Zhores Alferov — now under Hanwha Ocean’s ownership have been sanctioned by the US.
When contacted earlier this year, MOL said its Arc7s were not sanctioned but were delayed. However, it did not give a new delivery date for the ships.
They were originally due for handovers starting in March 2024.
