Greek shipping company Chandris has ordered a very large crude carrier (VLCC) for the first time in 16 years thanks to increased demand for tankers as a result of the Red Sea crisis and sanctions on Russian crude oil imports.
Chandris has signed a contract with Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering) for the construction of a 320,000 dwt VLCC, the company said on June 13th. The new VLCC will be built at Hanwha Ocean’s Okpo Shipyard in Geoje, using conventional fuels and equipped with scrubbers, at a cost of more than $125 million (KRW170 billion) per vessel, and is expected to be delivered in 2026.
The decision to order the new VLCC from Hanwha Ocean is based on a foundation of trust from previous cooperation between the two sides. In 2015, Chandris placed an order for 1+1 173,400 m³ liquefied natural gas (LNG) carriers with then Daewoo Shipbuilding & Marine Engineering, and in 2003 the two sides signed a contract for the construction of two 105,000 dwt oil tankers.
It is worth noting that this new contract with Hanwha Ocean is Chandris’ first VLCC order in 16 years, with the company’s last VLCC order dating back to 2008, when it signed a contract with Samsung Heavy Industries for the construction of 1+1 VLCCs, at a cost of $160 million each, which were completed and delivered in 2011. Chandris did not exercise the option due to the sharp contraction of the market after the global financial crisis.
Founded in 1915, Chandris is a ship management company specializing in the management and operation of tankers and chemical tankers, with a fleet of 12 tankers, including two VLCCs built in 2003 and 2011.
So far this year, although there has been an increase in global VLCC newbuilding orders, they only account for about 5% of the global fleet. Prices for both new and used VLCCs are rising due to tight shipyard slots and low prior order levels. Clarkson data shows that the latest market price for VLCCs is currently US$130 million, and second-hand deals for 4- to 5-year old VLCCs are at US$115 million.