Bergen-based chemical tanker giant Odfjell is cancelling two 22,000-cbm LPG carriers at Nantong Sinopacific Offshore & Engineering in China due to excessive delays.
Managing director Kristian Morch confirms the move, adding that the company has been fully refunded.
He says it is likely that two sisterships also will be cancelled when the contract allows it. The ships reportedly were ordered for $50m each.
The LPG carriers were part of a bigger deal with Sinopacific, which also included four 17,000-cbm ships in partnership with Oak Hill Advisors and Breakaway Capital.
The Chinese shipyard is now in the process of being restructured.
The first of the 17,000-cbm ships — expected to be delivered next year — is almost complete and the intention is to build as many as five units.
Several gas tanker players, including Solvang, Navigator Gas, Bernhard Schulte and Eletson Corp, reportedly have shown interest in the ships but a deal appears difficult to conclude given the current poor market.
Odfjell re-entered the LPG segment in 2012 when it bought the 9,000-cbm Bow Gallant and Bow Guardian (both built 2008), which the company is trying to dispose of now that its latest newbuilding project appears to have failed to materialise.
Brokers say Odfjell has high price expectations for the duo. The ships were bought from Berlian Laju Tanker for $31m each and likely are worth $21m today.
Given the poor market, Odfjell is also probably happy to exit the newbuilding project, with all its costs covered, observers point out.