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Avance Gas signed newbuilding contract for two Medium-Sized LPG/Ammonia Carriers

Written by Customer Service on . Posted in Public Companies.

Hamilton, Bermuda

June 7, 2023

Avance Gas Holding Ltd (“Avance Gas” or “the Company”) (OSE: AGAS) has today entered into a newbuilding contract with CIMC for the construction of two mid-sized LPG/ammonia carriers with dual fuel engines that can run on LPG as fuel in addition to compliant fuel oil.

The ships will have a cargo capacity of 40,000 cubic meters and scheduled delivery is during the fourth quarter 2025 and the first quarter of 2026. As the ships will also be equipped with shaft generators this will further improve operation and maintenance cost while improving the environmental profile. In addition to transporting traditional LPG cargoes, the vessels will also be fully able to carry ammonia cargoes. The seaborn ammonia trade is expected to grow significantly in the coming years due to the numerous blue and green ammonia projects. Contract price for the newbuildings is approximately $61.5 million per vessel i.e., $123 million in total. This compares very favourable to recent similar orders. As part of the agreement, Avance Gas will have an option to order two further newbuildings at same terms.

Øystein Kalleklev, CEO of Avance Gas, commented:
“We are thrilled to announce that we are broadening our product offering in Avance Gas with two high spec mid-sized LPG/ammonia carriers. These ships will be fitted with dual fuel LPG engines as well as shaft generators making them highly versatile and future proof in terms of emissions. These ships are not only perfect for the LPG trade but also ammonia trade as parcel sizes for ammonia cargoes tend to be in this size lot. Given the high expected growth of the ammonia trade, this makes the ships a very attractive addition to our fleet where we already have two VLGCs ready for burning ammonia and two VLGCs for delivery next year which can both carry and burn ammonia. Given the substantial cash balance in Avance Gas of $220 million at end of first quarter and the strong bookings for second and third quarter, we have the capacity to fully finance these ships without adversely impacting our strong dividend capacity.”

ABOUT AVANCE GAS
Avance Gas operates in the global market for transportation of liquefied petroleum gas (LPG). The Company is one of the world’s leading owners and operators of very large gas carriers (VLGCs) and operates a fleet of fourteen modern ships including two dual fuel LPG newbuildings for delivery in early 2024. For more information about Avance Gas, please visit www.avancegas.com.

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act

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