Euronav orders two at HHI, backed by seven-year charters

MAY 9, 2017 — Antwerp, Belgium, headquartered Euronav NV (NYSE: EURN & Euronext: EURN) has signed two seven-year time charter contracts with Valero Energy Inc. for Suezmax vessels with specialised Ice Class 1C capability, starting in late 2018. Euronav now has four long-term (seven years) Suezmax time charter contracts in its portfolio.

To fullfil the two new contracts, Euronav has ordered two high specification Ice Class Suezmax vessels from shipbuilder Hyundai Heavy Industries in South Korea.

Additional specifications for these vessels include substantially increased steel structure, specific emissions controls and other customized operational capabilities.

Delivery of these vessels is expected in the second half of 2018 when each of the time charter contracts will begin.

Euronav says it believes it has secured an excellent price for two high specification vessels. in line with its policy of not adding speculative new capacity to the global tanker fleet.

Euronav anticipates the new vessels on order will replace its older Suezmax vessels and will thus not add net tonnage to the global Suezmax tanker fleet.

In its first quarter results commentary, Euronav stated its belief that asset values are approaching a low point supported by reduced immediate newbuilding berths at shipyards and fewer speculative buyers. It says this transaction underlines this belief and that the addition of a further two seven-year contracts greatly increases it fixed income contribution to EBITDA in 2018 and onwards “which differentiates the company from its peer group.”

CEO Paddy Rodgers said: “By extending our strong partnership with a key customer, Euronav is also providing high quality and long duration earnings visibility for our stakeholders. Such fixed income capability provides Euronav with enhanced financial optionality as we move forward. “