Odfjell SE signs framework agreement with Sinochem Shipping Singapore

By Curious

Odfjell SE signs Framework Agreement with Sinochem Shipping Singapore Pte. Ltd to take 4 stainless steel vessels on long-term bareboat charters and to form a pool of 8 chemical tankers.

Odfjell SE (Odfjell) has signed a Framework Agreement with Sinochem Shipping Singapore Pte. Ltd (Sinochem) whereby Odfjell will take 4 of a total newbuilding order of 8 x 40,900 dwt chemical tankers on long-term bareboat charters.

Odfjell SE signs framework agreement with Sinochem Shipping Singapore

The bareboat charters include purchase options at the end of the charter period. Sinochem will continue to own 4 vessels, which together with the 4 bareboat vessels will form a pool of 8 x 40,900 dwt sophisticated chemical tankers. The pool will be managed by Odfjell SE and the vessels will trade as part of the Odfjell Tankers fleet.

The series of newbuildings are built at Hantong Wing Shipyard in China, with 30 stainless steel tanks capable of handling speciality products and with a proven energy efficiency. Seven of the vessels were delivered in 2016 and 2017, with the 8th newbuilding expected for delivery in December 2017.The 8 vessels will join Odfjell's fleet over the course of the coming months, and will replace existing tonnage which is currently on charter to Odfjell from other owners. The replacement of existing chartered-in vessels will have a positive impact on Odfjell SE earnings.

"With this structure, we will replace a large part of our maturing chartered-in fleet with more modern and sophisticated tonnage, and in a highly capital efficient way. We are also very pleased with the new relationship with Sinochem and with the trust they place upon us as managers of the pool", said Kristian Mørch, CEO of Odfjell SE.

"We are excited to embark on this new journey with Odfjell SE whom are both a recognized industry pioneer and market leader. The high-quality, sophisticated and flexible nature of our chemical tankers which are, proudly "Built-in-China", will be a natural fit in and an immediate enhancement to their first class global operating platform", said Zhang Xin, CEO of Sinochem Shipping.

The transaction is subject to satisfactory completion of competition law assessment and customary closing conditions.

Source: Odfjell SE