Reliance to take delivery of Japan MOL's China-built new VLCC

Delivery of new supertankers continues unabated despite the demand for cargoes being hit due to the war in the Persian Gulf and Japan's Mitsui OSK Lines or MOL, will June 12 take possession of a new VLCC, which has been given on a back-to-back charter to Reliance, brokers, shipowners and charterers said June 11.

"Reliance will take delivery of the new VLCC, named Himalayasan, tomorrow in Dalian," said three sources with direct knowledge of the matter. They said that the VLCC was manufactured at the Cosco Dalian shipyard, and MOL has chartered it out to Reliance for three years, with no option for additional years of charter.

This is the sixth VLCC to be time chartered by the MOL group companies to Reliance, and will increase the total MOL VLCC fleet size to 30, they said.

For over seven years now, Reliance and MOL are also co-owners of around half a dozen, 2016-17 South Korea-built Very Large Ethane Carriers, or VLECs.

"We don't comment on individual transactions," said a Reliance spokesman, citing the company's policy. MOL is yet to respond to a request for comment made June 11.

The Himalayasan is a duel-fueled, scrubber-fitted VLCC, which can run on both conventional and LNG fuel, but Reliance has decided to run it on high sulfur fuel oil for economic reasons, the same sources said. For economic optimization, the VLCC has flexibility for fuel selection, they said. Two brokers in Singapore said that the high sulfur fuel oil based bunkers in Singapore are around $602.5/mt, which is $150/mt cheaper than very low sulfur fuel oil.

While around 20% of MOL-owned VLCCs are chartered out to Reliance, the company's fleet has been given out to refiners and traders worldwide, but none are permitted to load cargoes in the Middle East due to the ongoing war, they added.

Sources in MOL confirmed that its tankers are currently not loading cargoes in the Persian Gulf, Red Sea, Fujairah and the Gulf of Oman.

Fleet expansion

Tanker brokers estimate the global VLCC fleet at about 885, including a dozen delivered this year. Another two dozen VLCCs are expected to be delivered during the rest of 2026, they said.

Firm tanker prices have not deterred investors from placing orders for new tankers, while second-hand ships are also changing hands. Dynacom Tankers Management has recently ordered a dozen newbuilding VLCCs from Hudong-Zhonghua Shipbuilding, with deliveries scheduled from late 2028 onward, two tanker brokers said.

The price was heard to be around $123 million for each tanker, they said. Dynacom is yet to reply to a request for comment made June 11. A Singapore-based sale and purchase tanker broker told S&P Global Energy that China-built VLCCs for newbuild orders are currently quoted at around $120-$125 million for delivery in the second half of 2029, and the corresponding price for South Korean-origin is $131-$132 million.

However, brokers in Tokyo and Seoul said it is increasingly difficult to secure VLCCs on time charter due to virtually no demand for loading in the Persian Gulf and still relatively higher rates.

A one-year VLCC time charter is being offered at around $110,000-$120,000/day, and the corresponding rates for three- and five-year hires are $70,000/day and $50,000-$60,000/day, respectively, one of the brokers said.