Shell Places $480M Order for MR2 Product Tankers in China

By Eve Church

Updated October 11, 2024 at 08:56 am Published October 11, 2024 at 12:34 pm Etc/UTC

Shell has turned to the Chinese shipbuilding market to secure MR2 product tankers valued at approximately $480 million.

Industry sources have linked the UK-based energy giant to a deal for ten newbuilds, each with a capacity of 50,000 deadweight tons (dwt), priced at $48 million apiece. The vessels will be constructed at CSSC Guangzhou Shipyard International (GSI).

These conventionally-fueled tankers are expected to join Shell’s fleet between 2027 and 2028. The agreement follows a letter of intent previously signed between Shell and the shipyard, which has handled over 70 MR newbuild projects.

Currently, MR2 vessels represent around 23% of the global tanker fleet, with over 1,700 ships in operation. However, a significant portion of the MR2 fleet is aging, with many tankers nearing the 20-year mark, prompting a rise in new orders over the past two years.

As of the end of September, the orderbook for MR2 tankers stood at over 17% of the current fleet size, making it the second-largest tanker orderbook after the aframax/LR2 category.