Secondhand Prices Tanker Prices Up 35%

Spiraling secondhand tanker prices, a buoyant charter market, and positive sentiment on the tanker market's future fortunes could mean a shortage of potential conversion candidates for FPSO projects in the months ahead. Clarkson's 5-year-old tanker price index showed a 359r rise year on year in December and tanker prices have continued upwards over the first two weeks of this year.

With as many as 60 likely FPSO conversions needed over the next five years, this niche sector represents a significant source of business for a number of repair yards, particularly Keppel. Sembawang and Jurong in Singapore. Although there are a significant number of single-hull tankers due to be phased (Hit in the next few years - and there are as yet no requirements for FPSO conversions to be double-hulled - tanker owners are expected to keep their ships in the current market for as long as possible.

Tanker demand is rising, shipyards are full and owners are likely to make a healthy return on tanker trading over the next 12-24 months. An added difficulty for those contemplating FPSO conversions is the long lead-time. In order to tender for FPSO projects, offshore conspecifications tractors are usually expected to submit their bids some 18-24 months before "first oil" is produced. As FPSO conversions do not usually take more than nine months, tonnage has to be identified in advance and effectively committed to a project. Not surprisingly, tanker owners expect to be paid a significant premium for this

Maritime Reporter Magazine, page 16, Feb 2004

Read Secondhand Prices Tanker Prices Up 35% in Pdf, Flash or Html5 edition of February 2004 Maritime Reporter

Other stories from February 2004 issue

Content

Maritime Reporter

First published in 1881 Maritime Reporter is the world's largest audited circulation publication serving the global maritime industry.