When clean cargoes go dirty

An eye-catching fixture was seen recently that gave a glimpse of the dirty side of clean tankers. The Medium Range tanker Iver Experience was reported to be on subjects to Lukoil to load a a 38,000 mt cargo of diesel oil on the US Gulf Coast and then head across the Atlantic.

That doesn't seem out of line, but the freight rate for that deal was Worldscale 85, or $11.72/mt, when that route was sitting at w102.5, $14.13/mt.

So, why the discount?

It turns out the last cargo the Iver Experience carried was a load of Arica condensate from the west coast of South America, which is not considered the cleanest of clean cargoes.

"Arica condensate is dirty," a charterer said. "It's dark and can require extensive cleaning, so there's a massive discount for later cargoes."

A source with a shipowner said though the ship may have to get cleaned, its owner may think the expense is worth it.

"A lot of people don't like to carry it," he said. "It's a clean product, but it is considered dirty, and a premium is involved [when it is carried]. But, I guess the owner figures he can just do a couple of gasoil cargoes and then get it cleaned."

Cleaning a ship can get pricey.

"It really depends on what you have to do," the shipowner source said. "You may have to ballast, then there are the four to six days the ship is out of service. It could easily cost $15,000 to $50,000."

Ships do not get their tanks cleaned on a set schedule, the shipowner said.

"It all depends on the last cargo and the next cargo," he said. "If they are the same grade, then you only strip and drain and load on top. If the last cargo was unleaded [and followed by jet fuel], then you do a full tank cleaning with fresh water rinse, which takes three to four days."

After that, the owner usually has to give a discount to the charterer for the first few cargoes, the shipowner source said.

"That's due to the fact that [charterers] want to look at the last three cargoes and make sure they are clean so there is no threat of contamination," he said. "If the cargo is something like gasoline, it probably won't make that much difference, but if it is a product like jet fuel, you want to make sure there is no contamination that could cause a failure."