SFL orders LNG-powered containerships in China

SFL Corporation has ordered LNG dual-fuel containerships from China’s New Times Shipbuilding, according to shipbuilding sources.

The deal includes the construction of five LNG-powered containerships with a capacity of 16,000 teu, sources told LNG Prime.

According to SFL’s website, the company has 34 container vessels in its fleet, including partly-owned ships and acquired vessels yet to be delivered.

SFL’s container vessels serve charter deals with Switzerland-based MSC, Germany’s Hapag-Lloyd, and Denmark’s Maersk, with whom SFL secured new charter extensions during the first quarter of this year.

Both MSC and Hapag-Lloyd have LNG-powered containerships in their fleets.

MSC, who is building a huge fleet of LNG-powered containerships, also has LNG-powered vessels on order at New Times. MSC could be the charterer of these SFL vessels, the sources said.

Lately, there have been talks in the industry that Maersk is also interested in chartering LNG-powered ships.

This move would represent a significant turn for Maersk that has been one of the biggest supporters of methanol-powered ships.

LNG Prime previously contacted Maersk to comment on the potential charter of LNG-powered vessels, but we did not receive a reply.

$1 billion

John Fredriksen-controlled SFL confirmed in a statement issued on Wednesday it has ordered five 16,800-teu container vessels with scheduled delivery in 2028.

SFL did not name the shipbuilder which will construct the LNG dual-fuel vessels.

According to the firm, the deal has an aggregate construction cost of about $1 billion, or some $200 million per vessel.

Concurrently, SFL has agreed minimum 10-year time charters to a “leading liner company” from delivery, adding about $1.2 billion to the company’s charter backlog, it said.

There will be an option to extend the charters for another two years, and purchase options at the end of year 10 and 12, including a profit share feature, SFL said.

11 LNG dual-fuel vessels

With these vessels delivered, SFL will have 11 LNG dual-fuel vessels in its fleet, the company said.

SFL already owns LNG-powered pure car and truck carriers and chemical carriers.

Earlier this year, SFL purchased two LNG dual-fuel chemical carriers for about $114 million.

The firm also arranged long-term employment for the vessels with affiliates of Stolt Tankers, a unit of Stolt-Nielsen.

Moreover, China’s Guangzhou Shipyard International (GSI) delivered in March this year SFL’s fourth and final LNG dual-fuel PCTC, Thor Highway.

In September 2023, GSI delivered the first LNG-powered PCTC in this batch, Emden, followed by the delivery of Wolfsburg in November.

Both of these PCTCs serve a long-term charter with German giant Volkswagen Group.

GSI delivered Odin Highway in January this year and this vessel and Thor Highway work for K Line under charter deals.

(Updated on July 3, 2024 to include a statement by SFL.)

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