Hafnia aims to transfer Japan-bound Cepsa naphtha from damaged tanker

The Hafnia Nile, a 2017-built LR1 tanker, which collided late last week with the 24-year-old VLCC Ceres I, plans to transfer its naphtha cargo before proceeding for repairs, its operator Hafnia and tanker brokers said July 23.

Hafnia is working closely with the Malaysia Marine Department and the Maritime and Port Authority of Singapore to develop a safe towage plan and assess a location for cargo transfer and repairs, a Denmark-based Hafnia spokesperson told S&P Global Commodity Insights.

Earlier, a spokesperson for Spain-based multinational energy company Cepsa confirmed to Commodity Insights that its naphtha from Huelva was onboard the Hafnia Nile. Brokers tracking the cargo said there was an option to discharge it in Japan. That will now be delayed.

The Hafnia Nile needs repairs before undertaking any commercial voyages and therefore the naphtha cargo will have to go undertake a ship-to-ship transfer, multiple sources tracking the developments said. The cargo will be transferred once the operator of the ship has received necessary evaluation from specialists, relevant authorities and insurance companies, sources said. Further assessments by experts on the site are ongoing, the Hafnia spokesperson said.

The tanker is currently in Malaysian waters with a towing connection in place to keep it in a steady position and is attended by four tugs equipped for oil response and firefighting, the Hafnia spokesperson said. The heat assessments have not revealed any hot spots on its external structure, and there are no visible signs of flames or smoke, the spokesperson said.

Over the weekend, Malaysian authorities accused the crew of the aging Ceres I of attempting to flee and detained the ship for further investigation. The authorities issued a statement saying that Malaysia's coast guard had found minor traces of an oil spill at the location of the collision.

The Ceres I, operated by China's Shanghai Prosperity Ship Management, has previously carried Iranian crude, which is subject to US sanctions, according to S&P Global Commodities at Sea. The company could not be immediately reached for comment.

Singapore's shipping conglomerate BW Group has a stake in Hafnia, which operates the world's largest fleet of LR1 tankers. Hafnia was listed on the New York Stock Exchange just over three months ago and continues to trade on the Oslo Stock Exchange. It operates more than 100 tankers. Asian LR1 tanker freight is at a four-and-a-half-month low due to weak refinery margins and sluggish demand to move oil products, market participants said.