China's Jiangnan Shipyard recently signed for up to six 83,000-cbm very large gas carriers with John Fredriksen’s Frontline 2012.
The shipowner will pay $127m for two firm vessels for delivery in 2014, a statement says. A further four options are attached to the contract with delivery in 2014 and 2015.
The newbuilding is costing $63.5m each, which is the lowest inflation-adjusted price for a VLGC newbuilding in two decades, according to RS Platou Markets. And Arctic Securities says the figure paid by Frontline 2012 is highly attractive with Japanese-built tonnage quoted at $70m.
Hyundai Heavy Industries of Korea booked several VLGCs this year for prices ranging beyond $75m nearing $80m.
RS Platou Markets explains the cancellation of Frontline 2012's five strong VLCC orderbook could free up $140m cash.
Fredriksen, chairman of the shipowner, said: “We are hopeful that Frontline 2012 within three years can be one of the major players in this [VLGC] market.”