SFL Orders Two VLACs for Ammonia Transport

SFL Corporation has placed an order for two Very Large Ammonia Carriers (VLACs) with a total yard construction cost of approximately $216 million, according to reports from Hellenic Shipping News and TradeWinds. The vessels, each with a capacity of 93,000 cbm, are scheduled for delivery in the second quarter of 2028.

Order Details

The newbuilds will be equipped with dual-fuel propulsion and cutting-edge technology for fuel efficiency and cargo intake optimization, as reported by Hellenic Shipping News. The exact specifications of the dual-fuel propulsion systems have not been disclosed, but the vessels are designed to transport a wide range of petrochemical gases.

Long-Term Charters

Concurrently, SFL Corporation has agreed on long-term time charters with a European-based investment-grade oil major, adding a minimum of $162 million to its fixed-rate charter backlog, according to Hellenic Shipping News. The initial charter period will be determined within the next six months, and the backlog may increase at that point. The charterer will also have options to extend the time charters by up to four years, providing a stable revenue stream for the company.

Strategic Investment

Ole B. Hjertaker, CEO of SFL Management AS, commented on the significance of the investment, stating, “The gas carrier project marks another accretive milestone investment for SFL, adding assets in a new segment. Including acquisitions and charter extensions announced so far this year, we have added more than $1.3 billion to our fixed-rate charter backlog in 2026,” as reported by Hellenic Shipping News.

Market Context

The growing demand for ammonia as a clean fuel alternative is driving investment in the sector. According to Ship & Bunker, the dual-fuel propulsion systems on the newbuilds will enhance operational flexibility and align with the increasing focus on sustainability in the maritime industry. The vessels' ability to carry a range of petrochemical gases will provide SFL Corporation with additional flexibility and market opportunities.

What This Means for Operators

The newbuild order and long-term charters indicate a shift in SFL Corporation's strategic focus towards the ammonia carrier market, highlighting the growing importance of sustainable shipping solutions. For operators, this development underscores the increasing demand for specialized vessels that can transport clean fuel alternatives, such as ammonia, and align with the industry's decarbonization goals. Operators should consider the potential benefits of investing in similar vessels or securing long-term contracts with established players in the ammonia carrier market to stay competitive and meet future regulatory requirements.