Market

Semi-refrigerated / ethylene carriers

This sub segment includes semi-refrigerated and ethylene carriers from 8,000 cbm and up. The group had six ships in this sub segment where three are on a longer term TC to 2019/2020, while the other three have been operating in the spot marked, on short term TC and on consecutive voyage contracts.

In March 2017, the group and partners signed shipbuilding contract for four 21,000 cbm ethylene carriers for delivery in 2019. The ships have complete exhaust gas cleaning and Tier III NOx compliance, giving high flexibility with regards to existing and future environmental regulations applicable from 2020.   

LGC/MGC

This sub segment is defined as fully refrigerated LPG ships from 59,000 – 60,000 cbm. The fleet consist of 9 LGC ships, where 3 were delivered in second and third quarter 2015. In addition one MGC of 38,000 cbm delivered in fourth quarter 2015 is also included in this sub segment. All ships operate on TC with varying length.  

The LGC newbuilds from 2015 represent a new type of LGC, with a shorter hull to avoid waiting time in certain areas, and there is considerable amount of development done in order to create the most energy efficient vessels possible. Changes including hull shape, propulsion technology, antifouling technology and cargo systems. Furthermore, the newbuilds are the first LGC LPG carriers in the world with fully integrated exhaust gas cleaning system for both the main and auxiliary engines. This means that the ships comply with all existing environmental standards in Emission Control Areas (ECA) from 2015, and the new expected global standards in 2020.

After two incredibly strong years, we have seen the LPG market drop significantly during the first and second quarter, and stay muted throughout third and fourth quarter. The much hoped for summer market did not materialize, and was the first clear proof that the expected downturn was here and would affect 2016 to a higher degree than first anticipated. Freight rates at the end of 2016 were almost reduced by 50% compared to beginning of the year.

VLGC

This sub segment is defined as fully refrigerated LPG ships of 75,000 – 84,000 cbm. Solvang has a total of 5 ships in this sub segment with further two newbuilds in order. The group has two Panamax VLGC ships of 75,000 cbm, one VLGC of 82.000 cbm, and two VLGC ships of 84.000 cbm.

The Panamax VLGC’s are purpose built for transporting LPG from the Atlantic Ocean and Gulf of Mexico to the west coast of Central America. As a result of these features, the Panamax VLGC’s   have also in 2016 achieved better TC earnings than the VLGC fleet in general. Both vessels are on new contracts during 2016. The “Clipper Victory” is on TC to August 2017 with an option for remaining of the year, while the “Clipper Sirius” is on TC to end of 2017 with an option for further 1+1+1 year.

The 82,000 cbm VLGC “Clipper Sun” is on a TC until October 2017. “Clipper Quito” a 84,000 cbm vessel, is on TC to December 2017, and the “Clipper Posh”, a 84,000 cbm vessel, is on TC to December 2018.  

The VLGC subsegment was affected the most by the downturn in the LPG market. Up to three of the ships were on floating contract through 2016, and immediately got the effect of the drop in freight rates, which towards the summer was on levels with operating expenses.

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