Frontline to boost fleet with six new VLCCs
Bermudian-headquartered Frontline Ltd, one of the world’s leaders in the seaborne transportation of crude oil and refined products, is to add to its fleet of very large crude carriers.
Frontline said it has agreed to acquire through resale six latest generation ECO-type VLCC newbuilding contracts.
The company said the six VLCCs are under construction at the Hyundai Heavy Industries shipyard in South Korea and are being acquired for an aggregate purchase price of $565.8 million, including an estimated $25.7 million in additions and upgrades to the standard specifications.
Frontline said the vessels are designed to operate on different fuels, including biofuel, have the potential to be converted or retrofitted to consume fuel like LNG or ammonia and consequently there is an ability to cut CO2 emissions to zero when technology, logistics and the regulatory framework allows for it.
It added that the vessels will also be fitted with exhaust gas scrubber technology, high-end antifouling systems, equipped with digital energy performance solutions as well as compliant with specific Exxon Mobile lightering requirements to allow for maximum trading flexibility.
Frontline said five vessels will be delivered next year, starting in the first quarter, and the last vessel will be delivered in the first quarter of 2023.
The payment profile for this transaction means that the largest portion of the instalments on each vessel will be made on delivery, the company said.
Frontline will meet the financing needed with existing borrowing facilities, and will establish long term financing closer to delivery of the vessels, it added.
Lars Barstad, interim chief executive officer of Frontline Management AS, said: “This transaction is consistent with our core company goals to increase exposure to the VLCC market without adding to existing vessel supply. It further cements Frontline’s position in respect of owning a modern, high quality, fuel efficient fleet.
“The delivery schedule for these vessels is particularly attractive, in a timing window regarded closed for new orders. With this acquisition Frontline is tangibly moving on our journey towards lower carbon emissions.”
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