Norway’s Solvang is behind an order for three VLGCs at Hyundai Heavy Industries in a deal estimated to be worth well in excess of $300m in total.
The privately-owned Oslo-based company is understood to be paying around $106m each for the ships that will be delivered from the South Korean shipyard by December 2026.
The LPG carriers have a capacity of 88,000 cbm each but have a traditional panamax beam to allow the ships to pass the old Panama Canal locks.
Shipbuilding sources said Solvang was the owner that ordered the three VLGC newbuildings that were announced by HD Korea Shipbuilding & Offshore Engineering Co (HD KSOE) last Friday.
The South Korean shipbuilding group said the value of the gas carrier newbuildings contract amounted to KRW 416.2bn ($319.9m) and the vessels were ordered by a “European shipper”.
Solvang placed a similar contract for two ships at Hyundai back in 2015.
Solvang declined to comment on the orders.
The hefty price tag is likely to reflect limited delivery slots for the high-specification vessels in the Far East which have been in strong demand recently.
As a dedicated LPG carrier operator, brokers suggest that the Oslo-based owner will be taking a long-term view of the market for the newbuildings and may already have charter commitments lined up.
It may also view the investment as a fleet replacement after disposing of two LPG carriers last year, including the 73,500-cbm VLGC Clipper Sirius (built 2008).
Solvang is also committed to reducing its carbon footprint and more fuel-efficient newbuildings will help it to achieve further reductions in greenhouse gas emissions, while it also experiments with carbon capture.
A healthy VLGC market is encouraging considerable ordering activity in the sector with Eastern Pacific Shipping, Sinogas and Mitsui OSK Lines committing to major projects this year.
In its half-year report, broker Clarksons said the LPG market has had its strongest-ever half-year period, with VLGCs seeing rates hit $73,000 per day.
An increase in US long-haul exports to the Far East has been a major factor in supporting the booming market.
However, operators will be keeping a close eye on the growing backlog of newbuilding orders.
There are around 90 VLGCs on order at the moment compared to a fleet of 381 vessels.
