State-owned Dalian Shipbuilding Industry Co (DSIC) is close to bagging a $164m contract for a pair of VLCC newbuildings from Procopiou family-led Dynacom Tankers Management.
Attracted by pricing, the George Procopiou-founded shipowner is said to have commissioned the Chinese shipyard to build the 300,000-dwt crude carriers for delivery in late 2022.
One DSIC executive played down the tanker contract, saying no deal had been done.
A Dynacom Tankers executive told TradeWinds the company does not comment on business matters, especially those that have not materialised.
TradeWinds understands that talks are ongoing between the two outfits.
Competitive pricing
Industry players said DSIC’s competitive pricing had attracted Dynacom Tankers to sign up for the two vessels. It is said to be paying about $83m per ship.
“Dynacom [Tankers] was previously in talks with New Times Shipbuilding for the VLCCs,” said a shipbuilding expert. “But it dropped the discussion there and went to DSIC due to a lower price.”
One shipbuilding source familiar with New Times said the privately-owned shipyard had quoted a higher price for VLCCs, as its focus is on aframax and suezmax tankers.
In addition, the shipyard’s orderbook is fully booked until late 2022.
Dynacom Tankers is a long-standing client of New Times. The company has ordered close to 40 vessels there over the past 20 years.
It originally considered ordering the VLCCs at New Times as well, alongside five suezmaxes it firmed up there earlier this year.
Suezmax deal
Its suezmax deal at New Times does not include any options and Dynacom Tankers is said to be paying $55m apiece for the 158,000-dwt crude carriers.
Industry players believe NS Lemos was the last Greek owner to book newbuildings at DSIC.
TradeWinds' archive lists Lemos as ordering a 110,000-dwt crude tanker in March 1997. However, the owner did not take delivery of the ship after a breakdown in the main engine delayed its completion.
“Since then, DSIC stayed away from contracting newbuildings from Greece,” said one shipbuilding player. “The shipyard was also busy with orders from domestic owners, such as Cosco and China Merchants Energy Shipping.”
“DSIC has a new president, Yang Zhi Zhong, and he has ordered for a change,” the shipbuilding player said.
Dynacom Tankers is said to have opted for conventional tankers at both DSIC and New Times. It is also not installing scrubbers on the ships.
Last autumn, Procopiou said he would opt for compliant fuel over LNG and scrubbers, saying: “Things are changing too fast and other, better, solutions will be coming.”
Fuel of the moment
He said he would order ships with smaller engines and burn compliant fuel or even 0.1% low-sulphur offerings.
"I do believe that LNG is the fuel of the moment," he added. "But that moment will not last for very long. It is a good fuel but for a very short period.
"Technology is moving in very big leaps and we have to target the right direction."
Dynacom Tankers is not the only company that has opted for conventional tankers without scrubbers.
Singapore’s Eastern Pacific Shipping has done the same. The Idan Ofer-controlled company booked a pair of conventional suezmax tankers at Shanghai Waigaoqiao Shipbuilding last month for late 2021 and early 2022 delivery.
Harry Papachristou contributed to this article.
