Designs for dual-fuel VLGCs are being upscaled and may soon become a reality as shipowners look at ways to improve the economics and emissions of their vessels, Poten & Partners said.

In a webinar, the shipbroker's LPG desk head, Peter Stebbing, said 90,000-cbm and 93,000-cbm neo-panamax VLGCs make up 54% of the current orderbook.

But he said a 101,000-cbm vessel is in the "late stages of development".

"We would not be surprised to see a VLGC with over 100,000 cbm of carrying capacity in the near future although we understand there are still some terminal capacity issues to work through,"Stebbing said.

He added that these size increases combined with the reduced carbon emissions of the dual-fuel designs, which can run on LPG or marine fuels, have made these new vessels look "incredibly attractive" both from an economical and environment and mental perspective.

That helps boost shipowners green credentials and provides a compelling investment case for the orders.

Record breaker

Poten LPG consultant Shantanu Bhushan the "most striking" development this year has been newbuilding activity for VLGCs.

Stebbing said there have been 54 confirmed new orders this year — the highest on record —with the second largest being in 2014 when 46 orders were placed.

This tops up the VLGC orderbook to 76 vessels or around 24% of the global fleet.

Stebbing said all newbuildings contracted this year are for LPG dual fuel vessel compared to 2020 when half were scrubber-fitted

He quipped that at today's high propane prices over very low sulphur fuel oil shipowners might be wishing their dual fuel units delivering today were equipped with scrubbers instead.

But he added that owners paying up for dual-fuel vessels see it as an investment for the future.

LPG fuelling is such a compelling choice for VLGCs that BW LPG has been retrofitting their ships as dual-fuel vessels. Photo: BW LPG

The analyst said that while there were no orders for classic panamax-size VLGCs capable of transiting the old Panama Canal locks, in 2020 booking rule changes and congestion on the waterway has seen a return of this design.


Stebbing said 28% of newbuildings this year were for classic panamaxes, with 15 vessels of 86,000 cbm ordered at Hyundai Heavy Industries.

He said the increased popularity of these ships is due to design optimisation which has boosted their cargo capacity from 79,000 cbm.

Stebbing added that the increasing impact of delays at the Panama Canal makes this vessel design an attractive alternative to 84,000-cbm neo-panamax ships that will likely be exposed to more waiting time at the canal.

The Poten desk head detailed the newbuilding price rises for VLGC newbuildings which he said are the result of a combination of higher steel prices tighter yard availability and currency fluctuations.

Stebbing said a 91,000-cbm dual-fuelled HHI-built VLGC was priced at around $81m in January but today would cost between $90m and $92m.

Jiangnan Shipyard's 93,000-cbm Panda-class design was around $75m in January 2021 but today is priced at about $84m.

Stebbing said these asset price appreciations have pushed up the higher rates offered prompting a slowdown in the volume of long-term charters recently concluded against newbuildings.

He said today owners would be targeting a minimum of $900,000 per month for charters of newbuilding ships with delivery slots in 2024 and beyond. But charterers may also be considering a wait-and-see position, as 40% of the orderbook remains uncommitted.