BW LPG Limited has entered into ship building contracts for four Very Large Gas Carrier (VLGC) newbuildings with Korean shipbuilder Daewoo Shipbuilding and Marine Engineering (DSME).
The delivered cost of these vessels, including interest and other costs, is likely to be approximately USD 290 million, the company said in a stock exchange filing.
The vessels were previously reserved by DSME’s existing client, however; as explained by Andrew Hoare, CCO of BW LPG, “BW’s relationship with DSME has afforded this opportunity to us when it became available.”
The vessels are to be delivered in the third and fourth quarters of 2016.
“Whilst the exceptionally high rates of today are not likely to last forever, there are many years of anticipated growth in export volumes in this market, which elicits our desire to enhance our fleet and its capability. These contracts now provide us an opportunity to grow or renew our VLGC fleet in the coming years, without adding further to the new building fleet on order,“ Nicholas Gleeson,CEO of BW LPG, said.
The quartet will be financed from free cash and the revolving credit facility, BW LPG explained.