IN Brief:
- SFL has agreed to build two 93,000m³ Very Large Ammonia Carriers at an aggregate yard cost of approximately $216m.
- Deliveries are scheduled from the second quarter of 2028, with both vessels able to carry a range of petrochemical gases.
- Long-term charters with a European investment-grade oil major will add at least $162m to SFL’s fixed-rate charter backlog.
SFL Corporation has agreed to build two 93,000m³ Very Large Ammonia Carriers in an investment of approximately $216m, taking the shipowner into the gas carrier segment.
The vessels are scheduled for delivery from the second quarter of 2028 and will be capable of carrying a range of petrochemical gases rather than being restricted solely to ammonia. SFL says they will use dual-fuel propulsion alongside technology intended to improve fuel efficiency and cargo intake.
Both newbuilds have been paired with long-term time charters to an unnamed European investment-grade oil major. Those contracts add at least $162m to SFL’s fixed-rate charter backlog before the vessels enter service.
The initial charter duration will be finalised within six months, which could increase the backlog associated with the project. The customer will also have options to extend the charters for up to four further years.
Securing employment alongside the construction order changes the commercial risk around the investment. SFL is not ordering the ships solely in anticipation of future spot-market demand; a substantial portion of their early earning capacity is already tied to a contracted customer.
The approximately $216m yard cost and $162m charter backlog describe different financial measures and should not be compared as though one offsets the other directly. The first covers construction of both vessels, while the second represents minimum contracted charter revenue over a period whose final initial duration has not yet been disclosed.
Operating expenses, financing costs and residual vessel value sit outside both figures. The charter backlog nevertheless gives SFL more revenue visibility while the ships are being built and entering a market in which freight rates can vary significantly over time.
The order also broadens a fleet currently spanning container ships, car carriers, tankers, dry bulk vessels and offshore assets. Chief executive Ole B. Hjertaker described gas carriers as a new segment for SFL, placing the transaction within a wider 2026 investment programme.
A 93,000m³ capacity puts the ships towards the large end of the ammonia and LPG carrier market. Gas-carrier capacity is expressed as volume because the actual mass transported changes with the density and characteristics of the cargo loaded.
Ammonia is attracting investment for two separate reasons across maritime supply chains. It is already traded as an industrial commodity, while parts of the shipping industry are also assessing it as a future marine fuel.
An ammonia-capable cargo vessel is not automatically an ammonia-fuelled ship. SFL states that the vessels will use dual-fuel propulsion but does not identify ammonia itself as the propulsion fuel, so cargo capability and engine fuel should remain distinct in describing the order.
That distinction becomes more important as shipowners invest in vessels intended to remain commercially useful across uncertain fuel transitions. A ship capable of transporting several petrochemical gases retains a broader cargo base even if the growth of one individual commodity develops more slowly than expected.
SFL’s order follows another recent addition to ammonia-capable shipping capacity. Nakilat has taken delivery of an 88,000m³ LPG and ammonia carrier as part of a six-vessel programme at HD Hyundai Samho.
The two programmes sit at different stages of the fleet cycle. Nakilat’s vessel is entering commercial service now, while SFL’s ships will not begin delivering until 2028, showing capacity being added through both current fleet renewal and longer-term newbuilding commitments.
Specialised gas carriers have long construction lead times because shipyard slots, cargo containment systems, engines and handling equipment all have to be secured well before delivery. Matching a newbuilding with a charter can therefore give both owner and customer greater certainty over future transport capacity.
SFL also says the vessels will incorporate technology intended to optimise cargo intake. Small changes in tank design, vessel weight and operating limits can influence the amount of paying cargo carried within volume and draft constraints, making design efficiency directly relevant to voyage economics.
Fuel consumption affects the other side of that calculation. A vessel delivered in 2028 will enter a regulatory environment applying greater pressure to greenhouse gas intensity and energy efficiency than many ships currently in service were designed to meet.
The announcement does not identify the shipyard, so delivery performance and specific equipment cannot yet be assessed beyond the details SFL has disclosed. What is already defined is the broad commercial structure: two large gas carriers, approximately $216m of construction spending and at least $162m of contracted charter backlog.
That structure allows SFL to enter gas shipping with customer employment attached rather than making a purely speculative bet on future ammonia demand. The vessels’ ability to carry other petrochemical gases gives the company additional cargo flexibility if market conditions change before they begin operating.
