The July print MARINE LOG looks at the shortness of newbuilding slots that's starting to develop as owners scramble to acquire modern tonnage.Designed as a prime mover for diesel-electric propulsion or diesel mechanical systems, the engine has a 250 mm bore and 330 mm stroke and operates at 900-1,000 rpm. This speed was seen to be the best compromise between the industry preference for a low speed in heavy duty auxiliaries and the potentially lower price per kW of a fast- turning unit, keeping in mind the synchronous speeds needed for 50Hz and 60Hz electric power generation. However, depending on service requirements, the C-engine can also be delivered for 720 / 750 rpm
The emergence of “pooling” among the tanker owners of the world has already had its effect upon the tanker industry. The premium given to new tonnage has increased from some three/four worldscale points to as much as 20. Best known of the pools is Tankers International, which combines the fleets of Frontline, Osprey Maritime (which is now controlled by Frontline’s John Fredriksen), Klaus Oldendorff, Overseas Shipholding Group (OSG) and A.P. Møller.
Frontline recently increased its VLCC fleet by buying stakes in four VLCC’s previously owned by Norway’s Bergesen and a full share in a newbuilding ordered by another company that Frontline is acquiring, Norway’s Mosvold. Frontline also paid $107 million for a one-third stake in four Bergesen VLCCs, two already delivered and two being built at Japan’s Hitachi Zosen. The remaining partners in these vessels were other members of the Tankers International pool. Meanwhile, Frontline also paid an extra $5.3 million to gain full control of a 308,000 dwt ULCC ordered by Mosvold at Korea’s Samsung Heavy Industries (SHI). As we reported last month, Bergesen made a swift $12 million by selling a 296,000 dwt newbuilding for $83 million.
Bergesen’s policy of plucking profits from the S&P market while they’re available is understandable, given that the tanker market remains a highly volatile one. Recent plunges in the VLCC freight rates are a reminder that this is no game for the faint of heart.
Still, the fundamentals appear to point for long term increasing demand for modern tanker tonnage. And, in fact, oil tanker newbuilding slots could become very tight as demand for LNG carriers increases. For example, Korea’s Daewoo Heavy Industries (DHI) currently has a full orderbook for the next three years, having gained orders for eight LNG carriers during this year. Owners looking for tanker tonnage are increasingly likely have to turn to mainland China for newbuilding slots offering deliveries within a reasonable time frame .
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