Hyundai Heavy Industries rang in the new year with a VLGC newbuilding contract from a domestic shipping company.
The world’s largest shipbuilder started 2020 by winning a single 84,000-cbm vessel order from South Korean LPG shipowner KSS Line.
A KSS official confirmed the deal, adding that HHI is slated to deliver the vessel in April 2021.
The contract brings the total number of VLGC newbuildings that KSS has on order at HHI to four. This includes three gas carriers placed last year that are to be delivered in 2021.
“All our VLGC newbuildings will be fitted with scrubbers and they are able to transit through the old Panama Canal,” the KSS official said.
The company is said to be paying about $74m each for the VLGCs.
KSS has ordered its latest VLGC newbuilding against a charter contract from Dubai-based BGN International DMCC. The company did not disclose the rate but said the charterer has fixed the gas carrier for five years, with an option to extend for one to two years.
It is the third VLGC that BGN is to take from KSS. The company is also behind the charter of two VLGC newbuildings at HHI that it will charter for five years, with the option of extending the contracts for one to two years.
Spain’s Vilma Oil is the other company that has employed KSS VLGC newbuildings. The outfit has chartered the 84,000-cbm newbuilding for seven years at $830,000 per month. The VLGC is scheduled to leave drydock in early 2021.
Listed on the Korea Stock Exchange, KSS controls a fleet of 27 vessels, comprising 15 LPG ships, four LNG carriers and eight chemical tankers.
In 2018, KSS capitalised on its LPG and chemical tanker experience and set up KSS Marine — a third-party services unit.
The shipowner said the new entity aims to share its experience and know-how with partners to help them earn extra revenue.
Crew manning and training, vessel management and newbuilding supervision are among services KSS Marine offers.
HHI is seeking to secure $15.9bn worth of newbuildings this year.
The revenue target is split between three yards: Ulsan-based HHI is targeting $8bn, Hyundai Mipo Dockyard $3.65bn, and Hyundai Samho Heavy Industries $4.25bn.
The $15.9bn target was the same in 2019. Last year, company received order totalling 139 ships, achieving about 78% of the target.
