Carboflotta negotiates a double contract in Brazil
Petrobras sealed 3-year time charter contracts covering gas tankers Alessandro Volta and Luigi Lagrange
Carboflotta, Genoa-based shipowning group, negotiated a 3-year charter contract with Brazilian Petrobras for LPG tankers Alessandro Volta and Luigi Lagrange.
Carbofin took over the two gas carriers (38,000 cubic meters capacity each and built in 2006) from Maersk Tankers in 2010, “along with the existing charter contracts sealed with Brazilian Petrobras and Kock, USA-based fertilizer producer which operated the Luigi Lagrange to carry ammonia” Carbofin's President, Enrico Filippi, told Ship2Shore.
These contracts got close to deadline and Carbofin has recently determined bidding in the tender called by Petrobras, offering the Alessandro Volta, already operating on behalf of the Brazilian giant, and her sister unit Luigi Lagrange.
“Petrobras handled the whole procedure online through a dedicated website called Petronect and after a preliminary phase we were adjudicated the tender, negotiated final freight rate and sealed both contracts”.
Filippi illustrates that: “Petrobras chartered both units in at 467,000 dollars and 467,000 dollars freight rate for 35 months and will deploy both of them on a LPG cabotage service across the Country”.
According to Genoa-based shipowner these figures are not so high, “particularly if compared to some years ago. The Alessandro Volta was chartered Petrobras in 2015 at far higher rates, however the market has currently changed. The global LPG and ammonia fleet has grown from 80 to 120 units in the last 4 years and considering the relatively small capacity and unchanged demand this is a rather substantial increase”. Although freight rates drastically dropped “we are proud of the contracts we have just sealed”, confirmed Filippi.
“Freight rates fully cover operating costs. The market is currently ailing and other groups would unlikely negotiate a three-year charter contract and the average rate for 1 year stands at 420,000 dollars/month. Should this segment start booming in the future we'd definitely be glad to earn higher returns from other ships (currently all chartered out), on the other hand we still hold a long term contract with a top international player”.
Still according to Filippi “LGP and ammonia shipments can further grow, although other elements must be evaluated, such as the upcoming new sulphur restrictions”.
January 1st 2020 will be unforgettable: “We don't know what's going to happen. Many players will use low sulphur fuel in compliance with the new restrictions, while bunker cost will generally grow and newer units will become more and more appealing than old ones”.