International LPG trading and ship-owning firm Petredec Limited has ordered up to four ultra-modern eco-design very large gas carriers from South Korea's Hyundai Heavy Industries, to upgrade its aging fleet and to handle an expected rise in LPG supply, the company said Monday.
The order is for two firm vessels with an option for Petredec to order two more ships, each with a carrying capacity of 84,000 cubic meters, the Bermuda-based firm said in a statement in response to Platts queries.
The ships are due for delivery in 2015 and 2016, it added.
The VLGCs that Petredec ordered will be the first of Hyundai Heavy Industries' ultra-modern eco design, with innovative features to boost performance while decreasing fuel consumption. The vessels will carry an "Eco" notation from Lloyds Register in recognition of this design, the statement said.
"These ships will usher in a new era at Petredec, as we upgrade our fleet to further enhance efficiencies and economy of our operation," said Petredec Chief Executive, Giles Fearn.
"We are already amongst the biggest operators of VLGCs worldwide and this order further cements that position," he said, adding that the firm is actively investing in the future of its core business in LPG logistics.
The ships will be fitted with Hyundai-MAN ME type engines and the cargo plant has been designed by Babcock LGE Process, which incorporates a patented vent cool system to enable faster cargo loading while reducing power consumption. Shipping experts said such vessels can curb wind as well as the frictional resistance of waves.
Petredec's trading team is the single-biggest lifter of LPG in the Middle East, with up to 15 loadings a month, it said on its website.
The company currently owns 10 tankers for fully refrigerated LPG, three semi-refrigerated vessels and six ships for pressurized LPG, the website shows.
It also has 10 vessels for fully refrigerated LPG on time-charter, seven semi-refrigerated ships and 12 pressurized vessels. In addition, it has two pressurized vessels on bareboat charter, under which no crew or provisions such as fuel are provided by the owner.
GLOBAL TREND OF INCREASING ORDERS OF VLGCs
The move adds to the recent trend of ship owners ordering more very large gas carriers, as global demand for such ships is set to outstrip supply in coming years, with LPG exports forecast to grow 5% a year through 2016, shipping brokers and consultants had said.
Industry consultant Drewry Maritime Research said last month there were 11 orders for VLGCs aggregating more than 900,000 cubic meters last year, versus five VLGCs ordered in 2010 and four in 2011. A VLGC is about 54,000 dwt in size.
The average size has also grown to 32,125 cu m last year from 15,179 cu m in 2010 because of the 11 VLGC orders, Drewry said.
Bermuda-based tanker major Frontline Ltd. have confirmed a total of eight VLGCs, including an option for two more at China's Jiangnan Changxing shipyard, with one slated for fourth-quarter 2014 delivery. The rest are expected to come around 2015-2016, sources said.
Tomza Group has placed an order for a VLGC at Hyundai Heavy Industries, or HHI, for $73.5 million, with vessel due for delivery next April.
Shipping sources told Platts that HHI recently signed a letter of intent with a European company, heard to be Dorian (Hellas), for a new building VLGC. A spokesman for HHI declined to comment.
Norwegian financial services group DNB recently said LPG tanker fleet is expected to grow 4.8% next year, responding to rebounding demand for the product in Asia.