Frontline assigns first duo in new LR2 cooperation with Vitol

Fredriksen company also switches some tankers from clean to dirty trade

John Fredriksen’s Frontline has forged a long-range-two (LR2) tanker cooperation with trader Vitol.

The Oslo and New York-listed shipowner is providing the 111,000-dwt products tankers Front Altair (built 2016) and Front Castor (built 2017) to the new set-up, TradeWinds understands. It is unclear which ships Vitol is entering.

Frontline Management chief executive Robert Hvide Macleod confirms the company has struck a cooperation agreement with what he describes as the world’s largest oil trader.

The rates on the deal are said to be “pay as you earn”, with no limits on duration. “The set-up will only last as long as the parties are happy,” one clean tanker broker said.

Between 2015 and this year, Frontline will have taken delivery of 15 LR2 newbuildings, from Zhoushan Jinhaiwan Shipyard, Cosco Shipyard and Longxue Shipbuilding in China. It also has three aframax tankers, two of them owned privately by Fredriksen.

The tanker owner reported the LR2 orders in 2014 at a price of $50m each.

694edf85113d8a521720865455d66fbd Norwegian shipping tycoon John Fredriksen  Photo: LISW

This products tanker fleet has enjoyed extensive time-charter coverage but several of the charters will now be expiring.

In another move to secure more revenue, Frontline is switching three or four LR2 tankers with ice-class 1A notations to the dirty trade.

Sources say candidates for the move are the 111,000-dwt Front Antares (built 2017), Front Jaguar, Front Lynx and Front Ocelot (all built 2016) and the 108,650-dwt Sea Hope (built 2009). Switching from the clean to dirty trades will have a cost and takes time, a broker notes.

Macleod has previously stressed that LR2 tankers have this flexibility.

Elsewhere in the tanker charter market, US trader Koch Industries ­remains busy taking tankers on period deals.

Koch booked the 50,000-dwt products tanker Maritime Meridian (built 2016) from Singapore-based Aurora Tankers for a year. The rate is probably between $14,500 per day and $14,750 per day.

In the crude sector, Statoil has fixed two aframaxes. It booked the 114,800-dwt Affinity V from of Belgium and the 114,700-dwt Ionic Anassa (both built 2016) from Ionic Shipping of Greece. The deals are for six months at undisclosed rates.

In the same segment, Penfield Marine has fixed the 115,800-dwt Eser K (built 2010) from Turkish shipowner Kaptanoglu for six months at $14,500 per day with an option for six more months at $15,250 per day, TradeWinds is told.

This story has been amended to reflect that Frontline has entered into a cooperation agreement with Vitol, rather than a pool agreement.