Oslo — Yara International ASA has entered into shipbuilding contracts with Hyundai Mipo Dockyard (HMD) for the construction and delivery of two mid-size LPG carriers, with an expected cost per vessel of US$51 million. Following an evaluation of current new-build and time charter rates, Yara said it has chosen to build new vessels to cover part of its long-term transport requirement at attractive rates, meet stricter environmental regulations, and maintain flexibility to serve Yara’s production system. Yara has a base ammonia transport requirement of approximately 4 million mt/y to serve its European plants, and long-term off-take agreements in Trinidad and Australia. Since time-charter contracts require a parent company guarantee of hire payments, a decision to build rather than charter vessels does not materially impact Yara’s debt capacity. Yara is in discussions with potential partners for combined ship management and equity participation; however, Yara aims to retain majority ownership in the vessels. Yara is currently in discussions concerning further shipbuilding contracts for handy-size vessels, which are expected to be finalized and announced in January 2014.
Transparency Across the Fertilizer Value-Chain