John Fredriksen and his people in Frontline are negotiating contracts for 4 VLCC newbuilds in China. Two for delivery in 2009 and the other two, which will be optional, for delivery in 2010. Contracts will be ready for signing shortly. SFL is expected to be the owner of the newbuilds.
That should answer the questions raised by others here about renewal of the fleet and the need to replace tonnage that is converted to heavy-lift.
Some posters will remember that FRO/SFL is familiar with Chinese shipyards and will get two newbuilds delivered from Nantong Cosco Kawasaki Heavy Industries later this year. While South Korean shipyards have full orderbooks, the Chinese can deliver VLCCs for $104 million apiece against $120 mill in South Korea.
Other news: The rumour that Seatankers was buying 9 aframax combination ships from GMR turns out to be incorrect. Fredriksen withdrew from the deal and they ended up with Tanker Pacific in Singapore.
JF felt that he had too much on his plate right now.
Thanks for the update, this does a great deal help understanding of their building environment. I hadn't realized that the Chinese could work so much cheaper.
Well, that answers the question of whether FRO/SFL are going to replace the converted single hulls. They have more than 4 single hulls but I expect they will be doing more deals for the single hulls and buying more double hulls. The only reason they wouldn't is if they anticipate less demand for tanker capacity going forward. Possible but not likely.
I saw the headline at Tradewinds. Thanks for the update. It does lay to rest some concerns. Only two left. The high price of newbuilds/breakeven for them and whether there will be lots of oil needing shipment in a few years. I read many articles arguing one side or the other. Lots of oil/peak has occurred so its downhill forever.