Trafigura in Rare VLCC Gasoil Move

by Ship & Bunker News Team
Friday August 28, 2015

Trading house Trafigura will charter at least two "mint-fresh" very large crude carrier (VLCC) newbuilds to carry gasoil from South Korea to West Africa, a move sources say is unusual for gasoil transportation but is expected to yield savings for the firm, with the use of similarly priced but smaller vessels being more typical, Platts reports.

According to the unnamed sources, the two charters will happen next month, one of which was for $2.55 million from Cosco Dalian and the other for $3.15 million from Navig8.

The two vessels are expected to carry between 150,000 mt and 270,000 mt of product, a substantially larger amount than normal.

Gasoil is understood to be more typically carried on medium and long range product tankers, which often have a limit of around 90,000 mt.

"The rate is similar to an LR2 rate [for South Korea to West Africa], so if they can fill up the VLCC it will be very cheap," said an unnamed source at a global trading company.

The move was widely seen as advantageous for Trafigura, especially in light of a slide in VLCC rates this year as the demand to carry crude lessens.  

"They may not be able to fully load the VLCC, maybe 70-80 percent, but that is [still] going to be equivalent to three LR2 tankers," said another source. 

Trafigura was said to have declined to comment. 

It was reported earlier this month that falling Asian demand had been affecting VLCC Persian Gulf to East routes.