Tankers: Indian term LPG importers taking total 14 vessels on time charters

• Published date: 14 April 2016
• Publication title: Saudi Arabia News Gazette

14 April 2016 (P) Three Indian staterun oil companies are taking four VLGCs on term charters this year to take advantage of threeyear low freight rates and to handle rising LPG import volumes from the Middle East, shipping sources said this week.

With the latest, a total of 14 LPG vessels have, or will be, taken on time charter by Indian Oil Corp., Hindustan Petroleum Corp. Ltd. and Bharat Petroleum Corp. Ltd., sources said.

These comprise nine VLGCs and five medium or large gas carriers. BPCL on Tuesday closed its bid for a VLGC time charter for a twoyear period, with extensions for sixplussix months, sources said. The laycan starts June 130.

Among vessels said to be put on offer include Global United's Benny Princess, as well as vessels from India's Great Eastern Shipping, BW LPG, Phoenix, Dorian, South Korea's KSS Line and the VLGC EverRich 10, shipping sources said.

Most of the offers could be in the mid to high$20,000's/day, though one of the vessels could have been offered at around $35,000/day, sources added.

"It's India business, terms are tough. It's a fulltime job running term charters for Indian companies," said a shipping source, adding that it is difficult to determine the term charter amount.

The three other new term charters are for one year, with a oneyear extension, and for two years, sources said.

"The reason is the market is low and in case it picks up, it hedges them from the risk," another shipping source said, referring to the recent pick up in term charters.

The newest VLGC charters were said to have been taken at around $37,000$42,000/day.

These were down from IOC's charters of two BW LPG vessels in February at $50,000/day and BPCL's charter of Great Eastern Shipping's Jag Vishnu, in December 2015 at $55,834/day.

However, a number of VLGCs were chartered in 2014/2015 at around $31,000$46,200/day.

Sources said some Indian importers had been grappling with high term charter rates concluded in the past two years. But spot rates on the major Persian GulfJapan route have plunged 81% since last year's peak around midJuly to about $25.50/mt Wednesday, the lowest since...