LR1 Hafnia Nile nears completion of Cepsa’s naphtha cargo transfer after July collision

LR1 tanker Hafnia Nile, which hit the VLCC Ceres I just over a month ago, is gradually transferring its own remaining naphtha cargo to another tanker and will take a few more days to finish, several sources directly involved in the process said Aug. 21.

“The transfer process to another tanker arranged by Hafnia is underway and will take two or three more days. The load of the ship needs to be lightened before the ship goes for repairs,” one source said. “Only a part of Cepsa’s naphtha in the tanker was burnt while the rest is mostly safe,” the source said.

“It has been almost five weeks since the accident occurred and the due date for delivery to Eneos in Japan is long over, so if Cepsa has to supply an alternative cargo, terms would have to be negotiated afresh,” said a chartering executive in Singapore. Another trading executive said since Cepsa’s naphtha cargo was partly burnt in the accident, a claim may have been filed with the insurers and a distress sale to another buyer cannot be ruled out.

Cepsa is yet to reply to a query last week on the extent of damages to the cargo and whether a replacement parcel would be provided to Eneos under a separate deal, but a Madrid-based spokesperson for the company had told S&P Global Commodity Insights July 19 — the day of the accident — “we can’t provide details about clients.”

“The next update on the condition of Hafnia Nile will be out shortly,” a Hafnia spokesperson said last week.

The 2017-built tanker is in Malaysian waters and Malaysia Marine Department sources said they are working closely with salvors for the ship to transfer into another tanker arranged by Hafnia.

“It was Hafnia Nile which hit the Ceres I, and not the other way round,” Malaysian sources said. This was also confirmed by Singapore authorities that are tracking the developments as the tanker is registered under the city-state’s flag.

Malaysian authorities have accused the crew of the 24-year-old Ceres I of attempting to flee and detained the ship for further investigation. The authorities issued a statement saying that Malaysia’s coast guard had found minor traces of an oil spill at the location of the collision.

There was a light oil sheen that came out from the damaged area of Hafnia Nile, a company spokesperson said last month. Earlier this month, the spokesperson said that two tugs were used to disperse the oil sheen while oil from the damaged fuel tank and pump room was being transferred to a barge.

The Ceres I, operated by China’s Shanghai Prosperity Ship Management, had previously carried Iranian crude, which is subject to US sanctions, according to S&P Global Commodities at Sea. The company could not be immediately reached for comment.

Singapore-based shipping conglomerate BW Group has a stake in Hafnia, which operates the world’s largest fleet of LR1 tankers. Hafnia was listed on the New York Stock Exchange just over four months ago and continues to trade on the Oslo Stock Exchange. It operates more than 100 tankers.

Asian LR1 tanker freight is close to year-to-date lows due to weak refinery margins and sluggish demand to move oil products, market participants said.

Platts assessed LR1s on the benchmark Persian Gulf-Japan route at w123 Aug. 20, close to year-to-date lows of w122, Commodity Insights data showed.
Source: Platts