Crude Oil Move by Product Tanker Operator Whilst Major Charter Group Save Money

SWEDEN – DENMARK – WORLDWIDE – Concordia Maritime, by tradition a product carrier, is transferring some of its interest into crude oil transport after recording a loss in Q3 of 2014. Usually involved in the refined hydrocarbon sector the company has signed an agreement to charter 50% of a Suezmax tanker in a market it terms ‘attractive’. The charter period is one year from August 2015 with an option for an additional year and follows a similar charter taken out in 2014.

After following a policy of employing its entire fleet on long term charters for several years whilst financing its P-MAX fleet the Swedish based group announced a rebalancing of vessel types in January this year whilst acknowledging the policy has risks as well as potential benefits. A Suezmax has a deadweight of 158,000 tonnes with a length and beam of 274 and 48 metres respectively. The latest vehicle was built in South Korea and Kim Ullman, CEO of Concordia Maritime commented:

“This agreement strengthens our presence still further in the strong Suezmax market. At the end of last year, we chartered 50% of a Suezmax tanker. Both these tankers will be employed on the global spot market via the Stena Sonangol Suezmax pool. Also in the pool is our owned Stena Supreme. We regard the increased investment in the crude oil segment as a good complement to our P-MAX fleet of ten vessels with a focus on product tankers.”

Meanwhile Danish headquartered Norden has invested some of its spare cash immediately to reduce future charter payments. The company has announced that, through dialogue with a number of large Japanese owners, it has entered into agreements to reduce future time charter payments relating to nine vessels on long-term charter.

As part of the agreement, Norden has made a one-off payment of $51.5 million in return for a reduction of future time charter payments of $62 million in the coming 4 years corresponding to a total reduction in hire of $10.5 million. Overall, Norden says the change in the time charter agreements does not affect operations in the period from 2015-2018. After the one-off payment of $51.5 million, Norden’s cash and securities amount to $220 million while undrawn credit facilities amount to $419 million.

Photo: Life not always carefree on a tanker in winter. Courtesy of Concordia Maritime.