Image: AET Tankers

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AET Inc. Ltd and Shell International Trading and Shipping Company Ltd have formalised arrangements for the long-term charter of AET's two newbuild LNG dual-fuelled Aframax tankers.

AET's two 113,000-deadweight-tonne (dwt) vessels are currently being built by Samsung Heavy Industries in South Korea, where they will be fitted with twin LNG tanks.

Thursday's accord will see Shell take both vessels on a long-term charter commencing in Q4 of this year. They are due for delivery from Q3.

The deal follows Shell's recent agreement in February with Russia's SCF Group (PAO Sovcomflot) to charter two 114,000-dwt dual-fuel Aframax tankers, which are to be refuelled by Shell's LNG bunker vessels.

As Bunker Index previously reported, AET was awarded a contract by Statoil to build and operate two LNG dual-fuelled DP2 offshore loading shuttle tankers (OLSTs).

When operational in 2019, these ships are expected to be amongst the world's first LNG fuelled DP shuttle tankers. They will also incorporate Wartsila's volatile organic compounds (VOCs) recovery system to utilize VOC - the gas evaporating from the oil cargo tanks - as fuel.

AET said the Aframax agreement with Shell "builds on [the OLST] achievement and cements AET's position in the LNG dual-fuel market".

"It marks a further step in the company's ability to offer innovative and environmentally responsible solutions to its global customers," AET added.

Commenting on the time-charter tie-up with Shell, AET's President and CEO, Captain Rajalingam Subramaniam, said: "As a world leading owner and operator of petroleum vessels, we have a responsibility to embrace the future of sustainable shipping. AET strives to proactively adapt and embrace the opportunities that emerge from the industry and global environment. Therefore, we took the decision to begin building LNG dual-fuelled Aframax vessels some time ago and these two Aframaxes are amongst the first to take their place in our global fleet.

"As part of the MISC Group and its Sustainability Agenda, AET upholds our environmental stewardship by consistently evaluating greener solutions, and our investment in the LNG dual-fuelled Aframax tankers is a further tribute to this.

"Shell is a longstanding and highly valued partner, and we have been working together on these time charter arrangements for quite some time. The fact that Shell has agreed to charter our new ships is a true testament to their commitment to thriving throughout the energy transition and will encourage AET to forge ahead with our commitment to operate a future fleet, where at least half of our ships are fuelled with LNG."

Mark Quartermain, Vice President, Shell Crude Trading, said: "These two LNG fuelled vessels will help Shell Trading move crude, principally in the Atlantic basin. LNG is a credible marine fuel and will play an important role in our fleet as we introduce cleaner and more efficient vessels. As emissions standards tighten we continue to work with forward thinking companies like AET to support lower emission transportation solutions."

Yee Yang Chien, AET's Chairman and President/Group CEO of parent company MISC Bhd, remarked: "It is particularly apt that today's charter arrangements ceremony is taking place in London just after the International Maritime Organisation has concluded a further round of discussions on limiting and reducing ships' emissions. The MISC Group is working to a Sustainability Agenda that ensures we protect and sustain the environment we work within; support the communities we work for, and do all we possibly can to protect our planet for future generations. Today's arrangement to charter our first set of LNG-fuelled Aframaxes to Shell is another step on that pathway."