Stena Bulk has reportedly extended the period charters for two product tankers by five years after Top Ships sold them to US bank JP Morgan.
Market sources said the Swedish tanker operator is keeping the 49,700-dwt Largo Energy (ex-Stenaweco Energy, built 2014) and the Largo Evolution (ex-Stenaweco Evolution, built 2015) at $15,000 per day.
Stena president and chief executive Erik Hanell confirmed to TradeWinds that the pair remain on his company’s long-term charters, but he refrained from commenting on the rate level.
Changing hands
The two ships were thought to be sold to JP Morgan earlier this year, along with the 49,700-dwt Stenaweco Excellence (renamed Clearocean Moritz, built 2016) and the 50,300-dwt Eco California (built 2019) in an en bloc deal for $110m.
Nasdaq-listed Top Ships has said in exchange filings that it sold the Stenaweco Excellence and Stenaweco Energy but did not disclose the buyer or price.
The other two ships are still on its online fleet list.
When contacted, Top Ships chief financial officer Alexandros Tsirikos said he does not comment on rumours, while Andy Dacy, chief executive of JP Morgan Asset Management Global Transportation Group, did not respond to a request for comment.
The US bank has been amassing MR assets in recent quarters, with a particular focus on vessels tied to long-term charters with blue-chip companies.
JP Morgan bought four different MR ships from Top Ships in separate deals earlier this year, including the 49,700-dwt ECO Holmby Hills (renamed Clearocean Mathilde) and ECO Palm Springs (renamed Clearocean Music, both built 2018).
Low rates
The charters for the Largo Energy and the Largo Evolution were extended roughly in line with the market level.
For a MR with a carrying capacity of between 47,000 dwt and 48,000 dwt, Clarksons Research estimates a five-year rate at $15,000 per day.
Constructed by Hyundai-Vietnam Shipbuilding, formerly Hyundai Vinashin, the two ships have been on period charters to Stena or its affiliate since 2015.
The Largo Energy is currently fixed at $15,616 per day until February 2021, and the charter could have been extended by another 12 months at a daily rate of $17,350, plus a further year at $18,100.
The Largo Evolution is chartered at $15,516 per day until next October. The deal was attached with a one-year option at $17,200 per day, plus an additional 12 months at $18,000 per day.
But Stena managed to secure the five-year charters at a lower rate, with current freight rates in the doldrums.
As the Covid-19 pandemic continues to pressure oil demand globally, spot earnings of MRs have struggled to exceed their operating expenses of about $6,000 per day in recent weeks.
Five-year deals have been rare in the tanker market this year, which has been dominated by strong volatility due to the pandemic and an earlier oil price war.
“I had the highest earnings I had ever experienced for a voyage in March, then I had the lowest in October,” said a veteran owner with more than 10 years of experience in oil shipping.
