[Photo: CIMC SOE]
Hamilton, Bermuda August 21, 2023. Avance Gas Holding Ltd has declared the option of the two mid-sized LPG/ammonia carriers (MGCs) from Nantong CIMC Sinopacific Offshore & Engineering Co., LTD (CIMC SOE), announced in June 2023. The two newbuildings are equipped with dual fuel engines capable of running on both LPG as well as compliant fuel oil. The ships will have a cargo capacity of 40,000 cubic meters and are scheduled for delivery during the second quarter and the fourth quarter of 2026.
The ships are sister ships of the two MGCs contracted in June. As the ships will also be equipped with shaft generators this will further improve operation and maintenance cost while improving the environmental profile of the ships. In addition to be able to transport traditional LPG cargoes, the vessels can also carry ammonia cargoes. The seaborn ammonia trade is expected to grow significantly in the coming years due to the numerous blue and green ammonia projects incentivized through various tax credits and carbon taxed. Contract price for the newbuildings is approximately $61.5 million per vessel i.e., $123 million in total, same as the two ships contracted in June as the Company has utilized its option to acquire two more ships at this attractive price prior to the option lapsing.
Øystein Kalleklev, CEO of Avance Gas, commented: "We are pleased to expand our fleet with another two MGCs. With these ships we have contracted in total four new MGCs thereby broadening our product offering in Avance Gas while renewing the fleet. These ships will be fitted with dual fuel LPG engines as well as shaft generators making them highly versatile and future proof in terms of emissions. These ships are not only perfect for the LPG trade but also ammonia trade as parcel sizes for ammonia cargoes tend to be in this size lot. Given the high expected growth of the ammonia trade, the four new MGCs are very attractive addition to our fleet where we already have two VLGCs on water which are ammonia ready in terms of running it as fuel, while the two VLGCs for delivery next year can both carry and burn ammonia. Given the substantial cash balance in Avance Gas of $220 million at end of the first quarter, the recent sale of Iris Glory at $60 million and the strong freight market, we have the capacity to fully finance these ships without adversely impacting our ability to continue to pay dividends as we will demonstrate when reporting the second quarter results on August 30, 2023."
Source: Avance Gas
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