GE Shipping places order for 2 more tankers

Our Corporate Bureau
28 March 2006

The company said the orders placed for new vessels now stand at seven tankers and six offshore supply vessels. Of the seven tankers, two are LR1 class and the rest are MR class.

Product tankers are ships with coated tanks used to transport refined petroleum products. LR1 tankers are vessels with the maximum dimension to pass through the Panama Canal. MR tankers are medium capacity vessels of between 25,000 and 50,000 dwt.

GE has also signed an agreement to purchase a recently built Aframax class crude oil carrier, which is expected to join the company's fleet this month. Aframax tankers are too large to pass through the Panama Canal and usually have a carrying capacity of less than 120,000 dwt.

Shipping companies across the world have enjoyed a boom period over the last couple of years as freight rates have increased considerably. The increase in international trade volumes and higher crude prices have contributed to this up trend.

Higher ocean freight rates have resulted in higher prices for vessels and shipping companies have also improved their bottom line from sale of ships. Shipping companies have also placed significant orders for new vessels and most shipyards are fully booked for the next few years.

Freight rates have already come under pressure and may fall further when the new vessel deliveries start over the next year or so.