Euronav, the Antwerp-based shipping company, has signed a deal to take over ownership of three new oil tankers currently being constructed in South Korea.
The company says it was presented with the opportunity in the light of confusion in the shipping sector caused by the coronavirus, especially its effect on imports of oil to China. As a result, the company obtained the three Very Large Crude Carriers (VLCCs) for €280.5 million or €93.5 million each – a lower price than would usually be expected.
Euronav said it would finance the deal through current liquidity and debt capacity. The identity of the seller has not been disclosed. Importantly, the new ships will not add to the size of the oil tanker fleet, which is currently suffering depressed prices caused by over-capacity.
“All three vessels will be fitted with exhaust gas scrubber technology and ballast water treatment system,” the company said in a press release. “The vessels are due to be delivered early in the fourth quarter 2020 and in January and February 2021 respectively.” The timing will allow Euronav to take advantage of the increased demand expected at the turn of the year.
The fitting of scrubbers, which clean exhaust gases, allows the ships to remain in line with IMO 2020, the newest rules from the International Maritime Organisation on seagoing ship emissions. Euronav has until now fuelled its ship with low-sulphur fuel to achieve the same end.
“The large tanker fundamentals remain constructive despite substantial headwinds surrounding economic activity linked to the Corona Virus that we believe and hope will be temporary,” said Hugo De Stoop, Euronav CEO. “Current disruptions to the freight market have provided an opening for Euronav to be opportunistic and deliver what we believe will be long term value for our stakeholders. This transaction demonstrates our flexibility and our capacity to seize opportunities thanks to a strong balance sheet and a robust liquidity position.”