Kumiai drops oldest VLGC as it gears up for newbuilding

January 31, 2019 06:53 GMT
Trond Lillestolen

Kumiai drops oldest VLGC as it gears up for newbuilding

Kumiai Navigation is selling its oldest VLGC as the company gears up to receive the first of two newbuildings from Kawasaki Heavy Industries in April.

Brokers said the Singapore-based shipowner’s 79,000-cbm Ocean Orchid (built 2001) has been sold to an undisclosed Middle East-based buyer for $24m, which is slightly higher than expected.

Renewal plan

Managing director Tomo Kuroyanagi confirmed the ship had been sold and that the move is part of the company’s renewal plan. The Ocean Orchid has been on charter to a Japanese LPG importer.

Kawasaki is Kumiai’s favoured VLGC shipyard. All its four ships on the water in this segment were built there, and the yard is building both the company’s newbuildings.

VLGC demand

Trading buyers are emerging for VLGCs that are even older. Great Eastern Shipping of India has sold the Kawasaki-built, 75,000-cbm Jag Vishnu (built 1994) to an undisclosed buyer. Brokers report that the deal has been done for $11m.

The company bought the ship as JA Sunshine for $26m in 2013. For periods, the vessel has been a cash cow for Great Eastern. In 2016, for example, the shipowner earned a massive $20m on a one-year charter to Bharat Petroleum.

Also, Hong Kong-based Pacific Gas has sold the 75,000-cbm Gas Jasmine (built 1990) for further trading to a Chinese buyer. The Kawasaki-built ship has gone for $10m, brokers said. The price is higher than expected.

The scrap value for the Gas Jasmine is an estimated $7m. Pacific Gas bought it as the Crystal Mermaid from Petredec for $20m in 2013.