Tanker shipping company Frontline on Tuesday announced it has acquired six very large crude carrier (VLCC) newbuilds currently under construction at the Hyundai Heavy Industries shipyard in South Korea.
The six ECO-type VLCC contracts are being acquired for an aggregate purchase price of $565.8 million, including an estimated $25.7 million in additions and upgrades to the standard specifications, the company said.
Lars H. Barstad, interim CEO of Frontline Management AS, said, “This transaction is consistent with our core company goals to increase exposure to the VLCC market without adding to existing vessel supply. It further cements Frontline’s position in respect of owning a modern, high quality, fuel efficient fleet.”
The ships are designed to operate on different fuels, including biofuel, and have the potential to be converted or retrofitted to run on fuels such as like liquefied natural gas (LNG) or ammonia, and consequently there is an ability to cut CO2 emissions to zero when technology, logistics and the regulatory framework allows for it. Frontline said the newbuilds will also be fitted with exhaust gas scrubbers, high-end antifouling systems, equipped with Digital Energy Performance solutions as well as compliant with specific ExxonMobil lightering requirements to allow for maximum trading flexibility.
“With this acquisition Frontline is tangibly moving on our journey towards lower carbon emissions,” Barstad said.
Five of the vessels are slated to be delivered during 2022 starting in the first quarter, and the last is scheduled to be handed over in the first quarter of 2023.
“The delivery schedule for these vessels is particularly attractive, in a timing window regarded closed for new orders,” Barstad said.
The payment profile for this transaction means that the largest portion of the instalments on each vessel will be made on delivery of each vessel. Frontline will meet the financing of this acquisition with existing borrowing facilities and will establish long term financing closer to delivery of the vessels.
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