Nov 3, 2004
Frontline charters out single-hull VLCC's
Frontline has chartered out two single hull VLCCs for a period that will cover the remaining life of the vessel until IMO's single hull ban comes into effect in 2010.
The Front Lady and Front Highness, both built in 1991, have been chartered to a subsidiary of Titan Petrochemicals Group, a Hong Kong Stock Exchange listed company.
Titan Petrochemicals is an international oil services company mainly focusing on oil trading, storage and ship refueling, presently controlling 29 ships.
Frontline says the contracts will provide it with a guaranteed minimum hire of $35,000 per day. In addition the charter party provides the parties with an equal share of the upside potential should the spot market yield higher earnings than the minimum hire.
Over the contract period, Frontline says it will see a net aggregate profit of $35,000,000 based on the minimum hire compared to Frontline's commitments to Ship Finance International. This reduces the cash break even rates for Frontline's remaining spot VLCC exposure to Ship Finance International Limited to approximately $850 per day until 2010.
Frontline says the chartering out of these vessels is part of its strategy to take advantage of the present high spot market to secure long term coverage as well as retaining a significant upside in the market for part of its fleet presently employed in the spot market