Navig8 Launches New LR2 Pool to Target Increased Mideast Trades

The Singapore tanker player is looking to exploit rising tonne-miles coming out of new refineries in the Middle East. Singapore based Navig8 has added to its growing scope of tanker pools by setting up a new long-range two (LR2) products tanker venture.

Called the Alpha8 pool, five coated aframax tankers have already been committed, some directly by owners joining the pool and others through time charters. Another two vessels are set to join in June.

Navig8 commercial director Rasmus Bach Nielsen describes the Alpha8 pool as a natural addition to Navig8’s existing handy, Medium Range (MR) and long range one (LR1) pools.

“While the market has come off from the (first quarter) highs we are confident that the market for coated tankers going forward is set to benefit from the increased tonne-miles with the new refineries placed far away from the consuming destinations. We are excited to further participate in this market growth through Alpha8,” he told TradeWinds this week.

Navig8 appears to be targeting the growing LR2 products tanker trades coming about as a result of new developments in oil refining, which have seen numerous new refinery projects – investments worth billions of dollars – established in the traditional crude oil producing markets of the Middle East.

At the same time, environmental and cost considerations have seen a large reduction in refining capacity in regions such as the United States, Europe and Australia.

The net result is that more refining is taking place in the source markets and the products are being shipped further afield using increasingly larger tonnage.

Navig8 now controls over 190 ships split into 12 pools covering the crude, products, chemicals, and dry bulk sectors.

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Navig8, May 31, 2013