Odfjell Hires Four Chemical Tanker Newbuilds, Forms Tanker Pool with Sinochem

 Norwegian shipping and tank terminal company Odfjell SE has signed a framework agreement with Sinochem Shipping Singapore whereby Odfjell will take four newbuilding 40,900 dwt chemical tankers on long-term bareboat charters.

The bareboat charters include purchase options at the end of the charter period.

The four ships are part of a total newbuilding order of eight chemical tankers.

Sinochem will continue to own four vessels, which together with the four bareboat vessels will form a pool of eight 40,900 dwt chemical tankers. The pool will be managed by Odfjell SE and the vessels will trade as part of the Odfjell Tankers fleet.

The series of newbuildings are built at Hantong Wing Shipyard in China, with 30 stainless steel tanks capable of handling specialty products and with a proven energy efficiency. Seven vessels from the batch were delivered in 2016 and 2017, with the 8th newbuilding expected for delivery in December 2017.

The eight vessels will join Odfjell’s fleet over the course of the coming months and will replace existing tonnage which is currently on charter to Odfjell from other owners.

Odfjell said that the replacement of existing chartered-in vessels will have a positive impact on the company’s earnings.

“With this structure, we will replace a large part of our maturing chartered-in fleet with more modern and sophisticated tonnage, and in a highly capital efficient way. We are also very pleased with the new relationship with Sinochem and with the trust they place upon us as managers of the pool”, said Kristian Mørch, CEO of Odfjell.

“We are excited to embark on this new journey with Odfjell SE which is both a recognized industry pioneer and market leader. The high-quality, sophisticated and flexible nature of our chemical tankers which are, proudly “Built-in-China”, will be a natural fit,” said Zhang Xin, CEO of Sinochem Shipping.

The transaction is subject to satisfactory completion of competition law assessment and customary closing conditions.

As the challenging market for chemical tankers persisted, Norwegian shipping and tank terminal company Odfjell widened its net loss to USD 11 million in the third quarter of this year from a loss of USD 5 million seen a quarter earlier.

The results were also impacted by the market for terminals which was under pressure from falling forward prices of oil/products.