Tanker conversion thriving

Supply has overtaken demand in all oil tanker market segments and freight rates have fallen to below break-even rates. Almost 29 m dwt of tanker tonnage will be delivered this year and less than 3 m dwt has been scrapped so far in 2007.


However, conversion activity is thriving. The dry bulk market is extremely strong and VLCCs are queuing up for conversion to Very Large Ore Carries (VLOCs). We have a list of 10 confirmed VLCC conversions to be carried out by end 2007, 8 VLCCs that have been converted or are to be converted to VLOCs this year, plus 2 to Floating Production, Storage and Offshore loading facilities (FPSOs). Some 29 VLCCs are due for delivery, according to Clarkson, and two single hull (SH) tankers are being converted to double hull. Also affecting market balance, the average size of the 10 VLCCs that are confirmed for conversion is 259,200 dwt and the average size of the ones to be delivered in 2007 is some 307,200 dwt, or 18% bigger. According to Poten & Partners, the SH VLCCs are also employed for only about 70% of the time.

VLCC status

m dwt


-Conversion to VLOC 2007



-Conversion to FPSO 2007



+Deliveries 2007



Change 2007



VLCC Conversion to DH



VLCC Fleet 1 Jan 2007



VLCC Fleet increase %



SH VLCC fleet (-conversions)



VLCC deliveries



VLCC deliveries/SH VLCCs



 (Source for deliveries is Clarkson, but other sources say that 31-33 VLCCs will be delivered in 2007.)


There are also several other unconfirmed VLCC conversion projects, and smaller SH tankers are also being converted. Altogether we have a list of 24 tankers, or 2.9 m dwt, to be converted to VLOCs, FPSOs and Heavy Lift ships this year.


Contact: Erik Ranheim