Frontline 2012 considers more VLCC cancellations
Frontline 2012 Ltd is considering the cancellation of all five very large crude carriers (VLCCs) it has on order at China's Jinhaiwan shipyard, according to reports quoting Norwegian business daily Dagens Naerigsliv.
The Bermuda-based tanker shipper said last month it cancelled the first of the five newbuilding contracts in September 2012, citing late delivery.
Frontline Management AS managing director Jens Martin Jensen was quoted as saying in an analyst call that it is currently possible to contract a new, big oil tanker for about $80-85 million.
The price of the vessels being built at Jinhaiwan was originally set at $135 million when the deal was signed in 2008, and later renegotiated to $105 million in 2010.
Frontline 2012 is aiming to build a modern fleet, saying on its website that it has "the markets most advanced fleet, with fuel efficient engines," but the vessels currently on order are of an older design.
The yard has referred the cancellation to arbitration, but Frontline 2012 said it was confident it has a strong case and the claim towards the yard is secured by refund guarantees.
That tanker was due to be ready in January 2012, but the remaining four VLCCs at Jinhaiwan were reported as not due for delivery until February 2013.
