Tanker shipping company Petrobras Transportes S.A. (Transpetro), a logistics arm of Brazilian state-run energy group Petrobras, has terminated the contracts for two Liquefied Petroleum Gas (LPG) carriers on order from Vard Promar S.A., a 50.5% owned indirect subsidiary of Vard Holdings.
The vessels in question are the last two of a series of eight LPG carriers originally contracted in June 2010, for delivery from Vard Promar between 2014 and 2016, Vard said. The combined contract value for the series of eight vessels was USD 536 million.
The reasons behind the company’s decision to terminate the contract have not been revealed.
“Construction of the two vessels is at a very early stage. The company is currently reviewing its overall exposure to the Brazilian market, and the termination – if effective – is expected to reduce the company’s overall exposure”, Vard said in a stock exchange filing.
As a result, Vard said it would claim compensation from Transpetro for damages in relation to the terminated contracts.
However, as disclosed the contract termination is not expected to have a material effect on the earnings per share of the group for the financial year ending 31 December 2015.