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SFL orders 2 LNG-fueled car carriers, secures long-term charters

Bermuda-based ship owner and charterer SFL Corporation Ltd. has ordered two new dual-fuel 7,000 CEU car carriers that will be chartered out to an unnamed European automobile manufacturer.

SFL said it entered into an agreement with the car manufacturer to charter the vessel pair for a 10-year period from delivery in 2023.

The contract is on a time-charter basis, and until the new vessels are delivered, the client will charter SFL’s two existing car carriers, SFL Composer and SFL Conductor. 

Concurrently, SFL said it has agreed to construct the two newbuild vessels at a leading shipyard in China, subject to final documentation.

“The transaction is estimated to add more than $200 million in fixed-rate charter backlog, and we are adding … vessels designed to use liquefied natural gas (LNG) to our fleet. In addition, we intend to cooperate with our customer to use eco-friendly bio-fuel for the propulsion of the two existing vessels,” according to SFL.

“We are extremely honoured to be selected by an … automobile manufacturer with clear environmental ambitions. This transaction shows our commitment to invest in assets with lower carbon footprint and also how we can improve performance of existing vessels through the use of alternative fuels, in line with our ESG strategy,” Ole B. Hjertaker, CEO of SFL Management, commented.

“Over the last 10 years, SFL’s fleet has transitioned from predominately oil production and transportation assets, to mainly consisting of containerships and dry bulk vessels today. Including this new transaction, our fixed-rate charter backlog from shipping assets will be more than $2.4 billion.”

SFL has a fleet of more than 80 vessels which is split between tankers, bulkers, container vessels and offshore drilling rigs.