Greece's Kyklades Maritime has joined the growing list of shipowners looking to order dual-fuel VLCCs in South Korea.
The Alafouzos family-controlled company is said to be in talks with its favourite South Korean shipbuilder, Hyundai Heavy Industries, for two vessels plus two options.
Shipbuilding market sources said discussions for the tankers, which will be able to run on LNG and conventional fuels, are at an advanced stage. They also said the Greek company is not looking to order on speculation.
“Kyklades is lining up the ... newbuildings against charter contracts from oil major Total,” one source said.
According to industry experts, Kyklades may need to pay around $103m each for the tankers, with delivery slots available as early as 2022.
HHI officials declined to comment on the order talks, citing contract confidentiality. Kyklades did not reply to a request for comment.
Shipbuilding market sources said Total has been seeking to charter six dual-fuelled VLCCs since last year.
MISC order
In April, Total disclosed that it had signed a charter deal with MISC Berhad-controlled AET for two LNG-fuelled, 300,000-dwt VLCCs. The ships, to be built at South Korea's Samsung Heavy Industries, are scheduled for delivery in the first quarter of 2022.
It was suggested that AET is paying less than $105m each for the newbuildings, which will be fitted with type-C bunker tanks. The Malaysian shipowner is believed to have an option to build an additional three vessels at the yard.
Kyklades returned to the VLCC sector in 2017 after a 12-year absence by ordering a pair of 319,000-dwt newbuildings at Hyundai Samho Heavy Industries, which is part of the HHI corporate umbrella. It subsequently increased the order to eight. The scrubber-fitted crude tankers were reported to be costing around $86m apiece.
Kyklades expands suezmax fleet
While they were under construction, Kyklades sold four of the newbuildings to Kjell Inge Rokke-backed Ocean Yield in a deal that included charters back to the shipowner.
They later became part of Oslo-listed Okeanis Eco Tankers, in which the Alafouzos family holds a near 55% stake, through 15-year bareboat charters from Kyklades.
Four of the VLCCs are on charter to trader Koch Industries for two years. One ship, the 319,000-dwt Nissos Keros (built 2019), is fixed out to Norway’s Equinor for three years at $49,000 per day. The remaining three are said to be trading in the spot market.
Popular play
Besides being active on the VLCC segment, Kyklades is expanding its suezmax tanker fleet. It signed up last year for six scrubber-fitted 158,000-dwt newbuildings at Hyundai Samho Heavy Industries at close to $65m each.
Two of those crude tankers, to be called Nissos Sifnos and Nissos Sikinos, are slated for delivery in September and will join the Okeanis fleet. The remaining four are due for 2021 delivery.
In addition to Kyklades, Sanjay Mehta-backed S ONE Capital and three Chinese leasing companies are working on LNG-fuelled VLCC newbuilding projects.
Mehta, a former chief executive of India’s Essar Shipping, has signed a letter of intent with HHI for up to six LNG-fuelled VLCCs worth more than $630m in total.
In China, Minsheng Financial Leasing, ICBC Financial Leasing and Bank of Communications Financial Leasing are said to be in talks with state-owned Shanghai Waigaoqiao Shipbuilding and Dalian Shipbuilding Industry Co for four firm ships plus options for four more.
