SFL Corporation Expands Fleet with Cutting-Edge LNG Dual-Fuel Tankers

Acquisition Marks Strategic Move Toward Sustainability and Operational Excellence in Maritime Sector

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SFL Corporation, under the stewardship of John Fredriksen, has strategically expanded its maritime portfolio with the acquisition of two state-of-the-art LNG dual-fuel chemical tankers, bolstering its foothold in the specialized vessel segment. This acquisition, executed at an estimated value of approximately $114 million, reflects SFL’s commitment to operational excellence and long-term sustainability within the maritime industry.

Constructed in 2022 and 2023, these vessels boast cutting-edge design features, including stainless steel cargo tanks, optimizing the transport and storage of chemical cargoes. Furthermore, SFL Corporation has secured enduring employment opportunities for these vessels through long-term charters with affiliates of Stolt Tankers, a distinguished subsidiary of Stolt-Nielsen.

Scheduled for delivery between June and August of the current fiscal year, both vessels are slated for a minimum operational tenure of eight years. One vessel will operate under a fixed-rate time charter agreement, while the other will participate in a collaborative pool arrangement alongside vessels of comparable specifications.

The charter agreement for the fixed-rate vessel incorporates extension options spanning up to three additional years, alongside provisions for purchase options post years five and eight, subject to a mutually beneficial profit-sharing mechanism with SFL Corporation.

In elucidating the strategic significance of this acquisition, Ole Hjertaker, CEO of SFL Management, emphasized, “With these vessels, we will have six LNG dual-fuel vessels in our fleet. The market dynamics for stainless-steel chemical tankers are also very favourable now, with steady underlying growth in demand, an ageing fleet and a limited orderbook.”

Echoing this sentiment, Udo Lange, CEO of Stolt-Nielsen, highlighted the transformative impact of these dual-fuel vessels on operational efficiency and environmental stewardship, remarking, “[These] dual-fuel ships will lower the age profile and carbon intensity of our fleet while offering more flexibility in our core 33,000 dwt segment.”

This strategic maneuver follows SFL Corporation’s recent acquisition of three LR2 product tankers, underscoring its commitment to diversification and growth within the maritime sector. The vessels, procured from affiliates of Hemen Holding at an approximate aggregate cost of $230 million, are currently under construction in China, with delivery slated between the second and fourth quarters of 2024.

Similar to the charter arrangement with Stolt Tankers, the charterer of these LR2 product tankers retains the option to acquire the vessels upon the completion of the fifth and eighth operational years, further enriching the flexibility and strategic value inherent in SFL Corporation’s maritime assets.

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