Shell has homed in on its preferred shipowners as it moves to secure LNG newbuilding tonnage following a recent tender.
Market sources said three Asian companies are believed to be in the final frame for the planned newbuildings, initially involving up to eight units.
Shell secured berths for the ships with its own specifications at Hyundai Heavy Industries this quarter.
Those close to the business named South Korea’s Sinokor Merchant Marine as in line to book four vessels.
They said Malaysia’s MISC Berhad and South Korea’s H-Line Shipping will supply two ships each.
Sources said Shell has secured rates in the low $60,000s per day for charter hire periods of up to seven years. The vessels are said to be costing around $185m each.
Separately, the energy major is also understood to be pursuing a similar search for LNG carrier tonnage, targeting existing ships or already contracted newbuildings, that could double its haul of chartered ships.
Uncommitted newbuilds
Those with uncommitted LNG newbuildings, such as Capital Maritime & Trading and JP Morgan, have been named as among those competing for this business.
Industry players noted that Sinokor has four apparently charter-free LNG carriers on order at Samsung Heavy Industries. Sinokor has been a regular with Shell in deals to provide chartered tonnage.
In August, Shell Tankers (Singapore) agreed a long-term deal to charter 10 LNG-fuelled aframax crude oil tankers from Sinokor with a large number of optional vessels outstanding between the two companies.
Shell also worked with Sinokor previously on a haul of 30 MR tankers, in what was dubbed Project Silver.
Meanwhile, MISC has been vocal about its plans to move on newbuilding business across a variety of tonnage.
In October, the state-controlled shipping giant inked an order for two LNG carriers worth KRW 485.3bn ($407m) with SHI against 15-year charters to ExxonMobil’s SeaRiver Maritime. The 174,000-cbm ships will be delivered by March 2023.
Shell, which has consistently declined to comment on its commercial operations, is understood to have been moving quickly on its LNG chartering requirements, with brokers hinting that it is pushing to wrap up deals on newbuildings this year.
One observer said the company appears to be running a much larger repeat performance of its move on LNG tonnage last year.
In late December 2018, Shell booked six X-DF vessels — four from Christos Economou-led TMS Cardiff Gas and two from Sovcomflot (SCF Group) — that are under construction at HHI.
Shell, like some of its competitors, has been extending its LNG portfolio. Key among the projects it will need to supply with vessels is its 28 million-tonnes-per-annum LNG Canada development, which is targeted for start-up in 2023.
Shell is also seeking new vessels for its fleet replacement needs as it redelivers vessels from charters and sells on some of its older tonnage for conversion projects.
