Friday, June 4, 2010

Demand for crude storage on VLCCs rise, with four ships taken

Demand for crude storage on VLCCs has seen a pick-up, with four vessels
chartered for storage last week, Asian shipping sources said Monday.

Oil major BP and trading house Hetco chartered three VLCCs for storage
duty in deals done last week, while another supertanker was on storage duty
for an unidentified charterer.

The rise in demand for floating storage was mainly due to a lack of
demand for certain sour crude grades, market sources said, increasing the
incentive for companies to store the oil rather than sell it in the spot

In the latest fixture, BP has taken the 1999-built double-hull,
Antarctica, for storage at $57,500/day after the vessel completes a North
Sea-US Gulf voyage for the oil major, said brokers. It could not be confirmed
for how many days the vessel would be on storage duty.

BP had also taken the double-hulled Phoenix Vigor for a Persian
Gulf-Durban voyage with options for storage duty.

Trading house Hetco has taken the 2000-built double-hull, Maritime Jewel,
for a 30-day storage duty around $55,000-57,500/day. It was also heard that
the BW Utah was on storage duty. But details on its rate and charterer was not

"So far, [there has been a good number of inquiries for storage]. We did
some [deals]," a source with a VLCC owner said, adding that if crude falls
further, there would be a surge in its contango, making storage lucrative for

There are currently 27 VLCCs and one ULCC storing crude oil at various
locations around the world, said one ship broker. In addition to this, there
are an estimated 16 VLCCs at anchor in the Persian Gulf with unsold cargoes of
Iranian crude.

"Some charterers are asking owners to accept charterers' option to take
the vessel for storage after fixing for a single voyage," a broker said.

--Pradeep Rajan,
--William Bathurst,

No comments:

Post a Comment