Hanwha Ocean seals $256 million deal to build VLCC pair

South Korean shipbuilding major Hanwha Ocean has received an order to build two very large crude carriers (VLCCs) for a shipping company from Oceania.

Ultra-large crude oil carrier built by Hanwha Ocean; Photo: Hanwha Ocean

Under the contract, Hanwha Ocean will construct two VLCCs for KRW 342 billion ($256 million).

As explained, this is the first time in three years since 2021 that Hanwha Ocean has won an order for a very large crude oil carrier. The price of the vessels is also the highest in 16 years since the 2008 global financial crisis. 

The vessels will incorporate various fuel reduction devices developed by Hanwha Ocean and an optimized line to minimize carbon footprint. The shipbuilder recently developed a smart ship technology that monitors a vessel’s carbon intensity index (CII). 

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 “We are pursuing a selective order-taking strategy focused on continued profitability based on differentiated VLCC technology and construction experience accumulated over a long period of time, as well as the application of leading eco-friendly technology,” Hanwha Ocean official said.

These ships will be built at the Geoje shipyard and delivered to the shipowner in the first and second half of 2026, respectively. Additionally, this contract includes an option to sign additional contracts, so additional orders are expected in the future.

The market is slowly recovering, with 3 ultra-large crude oil carriers ordered in 2022, but 18 ships ordered in 2023. In addition, only 23 ships are remaining on orders worldwide, according to Hanwha Ocean.

Furthermore, according to the new ship price standards recently compiled by Clarksons, the price of ultra-large crude oil carriers has risen by more than 40% in the three years since 2021. Ultra-large crude oil carriers are emerging as a new high-profit ship type along with LNG carriers and ammonia carriers.

Last month, Hanwha Ocean secured an order for two 93,000 cbm ultra-large ammonia carriers equipped with eco-friendly technology. The vessels, valued at approximately KRW 331.2 billion ($247 million), were commissioned by an unnamed shipowner in the Oceania region.

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