A pair of 39-year-old LNG carriers have been sold for demolition but questions are being asked about how and when the ships will be delivered to the breakers during the coronavirus lockdown.
Brokers said the 130,000-cbm sisterships Fortune FSU and Lucky FSU (both built 1981) have been sold enbloc for around $17.6m on an "as is" basis in China.
The 72,000-ldt ships were sold for around $245 per ldt.
Specialist demolition broker Ed McIlvaney said that with all the major recycling centres closed for inbound vessels, it is “uncertain” what the delivery terms might be on these two ships and when the buyer might be able to get its own crew on board the ships to effect delivery.
McIlvaney said it appears some demolition sales still appear to be going through and the expectation is that the vessels sold will move to the breakers after lockdown periods are eased.
But he cautioned that the prices seen do not reflect the current uncertainty and added that any new sale should be considered as “subject to completion”, due to the present circumstances.
“Any buyers securing tonnage at the present time will be taking a risk — in particular as nobody knows exactly how long the coronavirus protective measures will be in place,” he said.
Any buyers securing tonnage at the present time will be taking a risk
Ed McIlvaney
The Fortune FSU and Lucky FSU have been mooted as demolition candidates for months, with earlier reports circulating that they had been sold.
The membrane-type vessels — formerly MISC Berhad’s Tenaga Dua and Tenaga Tiga — were reported sold to China’s Dalian Inteh in 2015 for $19.2m enbloc.
They were later listed under the fleet of a Singapore-based company, LNG Easy, led by former RS Platou broker He Yi Yong, with their new “FSU” tag names suggesting there were plans to use them as floating storage units.
In August last year, the duo was widely circulated for sale by shipbroker Braemar ACM but no concrete conclusion materialised.
Last October, MISC sold a sistership — the Tenaga Lima (built 1981) — for demolition in Bangladesh. At the time, brokers said the ship, which was offered on an "as is" basis in Brunei Bay, was sold for $453 per ldt, or $13.4m.
If this latest deal goes through, the Fortune FSU and Lucky FSU, which rank among the top 20 oldest LNG carriers in the global fleet, will become the second and third LNG carriers to be scrapped this year.
In January, it emerged that the 126,000-cbm GCL (ex-LNG Libra, built 1979) had been sold to demolition buyers in India.
Similarly, this Moss-type ship had been targeted for use as an FSU for a project in Djibouti, which failed to materialise.
LNG carrier scrap sales are rare, amounting to between two and five ships per year. However, there is an expectation that demolition sales may ramp up in the next few years as many of the older steam-turbine and first-generation ships are redelivered from their existing long-term contracts and more modern, efficient vessels take their place.
