BW Gas lays up four LPG ships.
Protracted and poor market conditions have seen BW Gas place four liquefied petroleum gas carriers from its fleet of 48 into layup, after low spot rates saw each ship lose $25,000 daily.
The company said it would be the first to put LPG vessels into cold lay-up and and hoped that other owners would follow.
The 1985-built, 81,599 cu m capacity Berge Racine would be laid up in Indonesia until its sale later this year. The remaining three unnamed vessels included a 1992-built large gas carrier and two VLGCs built in 2000-2001 and would be based in north European waters.
?There is significant oversupply in the market right now so our priority is to stop the bleeding until the market improves. I would be surprised if other owners do not do the same as there are too many ships right now,? BW Group chief executive Andreas Sohmen-Pao said.
He said VLGC carrier owners had earned an average of $5,000 per day since early 2009, around half of operating costs and just an sixth of the total breakeven costs.
He said the total lay-up costs, including the price of deactivating, then reactivating the ships when market rates have improved was around $2,500-$3,000 per day per vessel.
?This is set against the operating costs of $10,000-$12,000 per day. If we add the interest costs of $7,000-$8,000 per day then the cash breakeven is around $20,000 per day. Depreciation costs us around $10,000 per day per vessel so the total breakeven is $30,000 per day. But we have been earning just $5,000 per day or even less for the last 15 months,? Mr Sohmen-Pao said.
Each gas carrier has a fleet of 50-55 crew and most of the officers are Norwegians or Indians. Mr Sohmen-Pao said some of the crews could be given positions elsewhere in the fleet, but confirmed most would have to be laid off.
BW Gas could lay up more LPG carriers if rival owners would follow its lead, Mr Sohmen-Pao said.
BW Gas operates 26 VLGCs, out of a global fleet of 141 ships, plus seven of the 20-strong global fleet of large gas carriers, and 15 of the world"s 97 medium-sized gas carriers. It also owns 26 LPG carriers and 13 liquefied natural gas carriers.