Idan Ofer’s Eastern Pacific Shipping has dived in on two LR2 tanker newbuilding berths recently freed up at China’s Shanghai Waigaoqiao Shipbuilding (SWS).
Eastern Pacific is understood to have signed a letter of intent on the 115,000-dwt aframax product carrier newbuildings but firm contracts have yet to be inked.
Shipbuilding sources said the fast-moving shipowner is paying around $63m each for the two vessels which are scheduled for delivery dates in March and May 2025.
TradeWinds has learned that the LR2 slots were the two firm ships previously booked by trader Vitol.
Last week, this newspaper reported that Vitol inked up to four LR2 tanker newbuildings at the Chinese state-owned shipyard at between $62m and $63m each.
The deal involved two firm vessels, plus options for an additional two ships, which were to be fitted with scrubbers and run on conventional marine fuel.
Shipbuilding insiders said Vitol decided to call off the SWS order as it had failed to secure employment contracts for the pair.
Eastern Pacific was described as having “jumped straight into” the tanker slots when SWS put them up for sale.
Eastern Pacific CEO Cyril Ducau was not available for comment.
Vitol has previously declined to comment on its commercial shipping business activities.
Some brokers speculated that Eastern Pacific may want to have the LR2 tankers upgraded to dual-fuel ships as the company is fully committed to reducing its shipping carbon footprint. But they said this would add $10m per vessel to the contract price.
But others think SWS would be unable to accommodate an Eastern Pacific upgrade on the tankers to run on dual fuel. They highlighted that the recent five LR2 tanker newbuildings that the shipyard contracted — four from Thenamaris and one from Performance Shipping — will be powered by conventional fuel, although Performance’s lone vessel will be LNG-ready.
“To upgrade the ship to dual fuel requires new design, which we understand SWS is reluctant to do,” said a broker.
There has been a surge in interest in LR2 tanker newbuildings.
This is partly due to the Russia-Ukraine conflict. But also long-haul clean products trades have been growing as refining capacity expands in places such as India and the Middle East, with new modern export-oriented refineries, while older facilities in Europe and places such as Australia and South Africa close down.
Singapore-listed Yangzijiang Shipbuilding recently offered for sale 12 product tanker slots, which were quickly snapped up.
Oslo-listed Hafnia and three Greek companies — Metrostar Management, Pantheon Tankers and Union Maritime — were named as the shipowners that have taken up the tanker slots at Yangzijiang.
