International Seaways sells two ships for green recycling

New York-based tanker company International Seaways has sold two veteran Panamaxes for green recycling.

The duo, with an average age of 19 years, was delivered to their buyers in April 2022 and includes a 2002 and a 2004-built vessel. Buyers of the vessels and the yards where the ships would be dismantled were not disclosed.

The tanker shipping company said the sale was carried out as part of its fleet optimization program, and to capitalize on historically high recycling values.

“Net proceeds from the unencumbered vessels were about $14 million. All recycling was conducted in accordance with the Hong Kong Convention,” the company said in its business results for the first half of 2022.

The convention covers the design, construction, operation, and maintenance of ships, and preparation for ship recycling in order to facilitate safe and environmentally sound recycling.

As part of the fleet optimization push, International Seaways has also sold its four remaining Handysize vessels, built in 2006, which generated net proceeds of approximately $30 million in aggregate, after debt repayment.

A 2008-built MR vessel was also sold, resulting in net proceeds of approximately $10 million, after debt repayment and savings on upcoming third special survey and ballast water treatment installation costs estimated at approximately $3 million.

Furthermore, in June 2022, the company sold its 50% stake in two floating storage and offshore (FSO) vessels to its joint venture partner Euronav NV for $140 million.

The transaction has been approved by North Oil Company, the operator of the Al Shaheen field, whose shareholders are Qatar Energy and Total E&P Golfe Limited. The two FSO vessels have been serving the Al Shaheen field without interruption since 2010.

INSW’s net income for the first half of 2022 was $56.0 million, compared to a net loss of $32.1 million for the first half of 2021.

“We capitalized on oil markets that were the strongest we’ve seen since before the pandemic based on strong demand, supply constraints and depleted inventories as the world grapples with energy security. Refined product oil demand, particularly gasoline and middle distillates has outpaced supply even as refinery utilization is well above pre-pandemic levels,” Lois K. Zabrocky, International Seaways’ President and CEO, said.

“After a little more than a year since our transformational merger that tripled our fleet size and diversified our tanker portfolio with the addition of over 40 product carriers, Seaways is well positioned for the strong underlying fundamentals that we expect to firm the tanker markets over the next few years. We expect continued growing demand, limited fleet growth and higher utilization from the longer distances between oil supply sources and demand destinations.”