Oslo-based Avance Gas strikes a newbuilding contract with CIMC for the construction of two mid-sized LPG/ammonia carriers with dual fuel engines that can run on LPG as fuel in addition to compliant fuel oil.
The shipowner and operator of very large gas carriers (VLGCs) reveals today that the cargo capacity of the ships is of 40,000 cubic meters, while the delivery is scheduled during the fourth quarter of 2025 and the first quarter of 2026.
In addition to transporting traditional LPG cargoes, the vessels will also be fully able to 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, explains today the Oslo-listed company.
The contract price for the newbuildings is approximately $61.5 million per vessel, $123 million in total.
As part of the deal, Avance Gas will have an option to order two further newbuildings at same terms.
Øystein Kalleklev, CEO of Avance Gas, commented: “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, this makes the ships a very attractive addition to our fleet where we already have two VLGCs ready for burning ammonia and two VLGCs for delivery next year which can both carry and burn ammonia.”
The top manager of Avance Gas added that given the substantial cash balance in Avance Gas of $220 million at end of first quarter, and the strong bookings for second and third quarter, the company has the capacity to fully finance these ships without adversely impacting its strong dividend capacity.
The company is one of the world’s leading owners and operators of very large gas carriers (VLGCs) and operates a fleet of fourteen modern ships including two dual fuel LPG newbuildings for delivery in early 2024.