Eastern Pacific Shipping is eyeing suezmax tankers as it continues to invest in dual-fuel newbuildings.
The Idan Ofer-led company is finalising an order of up to four 158,000-dwt, LNG-fuelled ships at China’s Guangzhou Shipyard International (GSI).
A source familiar with the deal said Eastern Pacific is looking to book two firm vessels, plus two options.
The cost of the ships has not been disclosed but shipbuilding players said it will be between $67m and $68m each.
Officials at GSI declined to comment.
“A Chinese-built Tier III conventional suezmax tanker newbuilding is priced between $57m and $58m. If it is going to be a dual-fuel vessel, it will require an additional $12m to $14m per ship,” a shipbuilding broker said.
He added that if Eastern Pacific firms up the contract at GSI, it will be the first shipping outfit to sign up to dual-fuel suezmax tanker newbuildings, which will use LNG as bunkers.
The order will also help GSI break into the suezmax sector.
The state-owned yard is known for MR tankers but its Guangzhou Longxue facility has rolled out VLCCs, aframaxes, LR2s and VLOCs.
Charter talks
“Eastern Pacific is traditionally a spot player in the suezmax tanker segment. But for these newbuildings, it is holding dialogues with charterers,” the source said.
The company currently trades six suezmaxes built between 2010 and 2017 mainly in South Korea, but one was constructed in China.
“Eastern Pacific believes LNG will be shipping's fuel of the future,” the source said.
The diversified shipping outfit is investing in building up a dual-fuel fleet.
Its orders for LNG-fuelled newbuildings include a pair of LR2 product carriers at New Times Shipbuilding for delivery in late 2021, 17 containerships of 15,000 teu each at Hyundai Heavy Industries for delivery by 2022, and a deal for four MR tankers at Hyundai Mipo Dockyard that is being finalised.
Eastern Pacific is also one of the bidders for BHP’s dual-fuel newcastlemax bulker newbuildings.
Besides being active in the newbuildings sector, Eastern Pacific also has a presence in the sale-and-purchase market.
It bought three large LPG carriers from Neu Gas Shipping of Germany in August. The vessels were the 60,243-cbm Helsinki (ex-George N), Denver (ex-Ernest N) and Tokyo (ex-Jenny N, all built 2009).
Eastern Pacific is believed to have paid about $45m per ship.
The company is said to have benefited from soaring LPG rates, as it has secured a one-year charter for the trio.
Brokers estimate earnings per ship to be close to $1m per month, or some $30,000 per day per vessel.
Eastern Pacific has a trading fleet of 150 vessels.
