BW LPG boss Anders Onarheim is not interested in newbuildings unless there is a significant drop in prices at shipyards.

The Oslo-listed owner’s chief executive was asked on a conference call whether contracting new VLGCs would be a good way to spend some of its $329m cash pile.

He said: “What it would take for us to order new ships is that we see either a drop in newbuilding prices or new technology [so] that we can justify making a 25-year investment.”

A new VLGC costs $110m now, BW LPG believes. UK shipbroker Clarksons assesses the last-done price at $103m.

The CEO told the call: “When they’re down to $90m, we might start looking at it.”

Any vessel ordered now would be delivered in the second half of 2026, but that could quickly change to 2027 if bulker and tanker owners keep ordering ships, BW LPG argues.

Onarheim said there is still too much uncertainty to take the plunge, but the company has found an intermediate solution to lowering emissions by retrofitting 16 of its large carriers to run on LPG.

“We still think the risk reward is not attractive enough at these levels to invest in newbuildings,” the CEO told the call.

“We’re studying ammonia very closely. If we see opportunities that will give us good returns, we will look at them,” Onarheim added.

The company is enjoying having a low cash break-even figure, he said.

“A lot of newbuildings require much higher rates to provide appropriate returns,” he said.

Share buybacks versus investments

BW LPG has kick-started a $50m share buyback to return some cash to shareholders.

The shipowner is also continuing to evaluate investment opportunities.

Onarheim described this as a “constant discussion” and said the owner is in a strong position.

“Over time I would expect our cash position to be slightly lower,” he told the call.

The CEO sees good opportunities to invest, particularly through its joint venture in India.

But he cautioned: “We’re quite slow at making investment decisions. We want to make sure returns work out for us.”