Avance Gas has ruled out retrofitting LPG carriers to transport ammonia for now.
The company has already paid an extra $2m to allow its four mid-sized LPG (MGC) dual-fuel newbuildings to carry ammonia.
But replicating this on existing vessels does not make economic sense, chief executive Oystein Kalleklev told an earnings call.
The MGCs will be able to fill their tanks to 98% capacity with ammonia, against 85% on conventional LPG vessels.
Avance Gas has been reviewing the orderbook for very large ammonia carrier, which are growing in popularity.
“So there’s plenty of the ships, too many of them, in relation to what we expect to be the demand for ammonia carriers,” Kalleklev said.
The CEO also believes smaller vessels are more suited to the trades, having “a more ideal cargo parcel”.
“There’s no lack of the VLGC ships that can carry ammonia,” he told the call. “So if you have an ammonia project, you will typically tap into the VLAC, but you can also tap into the older VLGCs, which are capable of carrying that.”
“That means it doesn’t really make any economic sense to look at converting our existing ships, because there’s just so many ships that can do it. So we haven’t even done the calculation,” he added.
Kalleklev concluded: “If I’m wrong and ammonia demand takes off through the roof, maybe we will do those calculations, but I guess it’s much better to use the VLACs and then all the VLGCs instead of converting.”
