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Market

3. MARKET

3.1 Semi-refrigerated / ethylene carriers
This segment includes semi-refrigerated and ethylene carriers from 8,000 cbm and up. The group has seven ships in this segment, of which five are managed by ESE. Solvang’s ships in this segment achieved good average earnings in line with 2011, which was considered a good year for this segment. The improvement for ethylene carriers began in the fourth quarter of 2010, continued in 2011, and with some quarterly variations, has stayed strong in 2012. Main reason is high export volumes from the Middle East.

The “Clipper Harald” is on a time charter (TC) until October 2015, and the charterer has an option to extend the contract for an additional five year period.

The “Clipper Skagen” is on a TC until September 2013.

3.2 LGC
This segment is defined as fully refrigerated LPG ships from 57.000 – 60.000 cbm. The fleet consist of six ships, marketed by IGC. Two of the ships are on shorter-term employment, while three are on 3 year TC plus options, and the “Clipper Mars” is on a TC until 2022.

The average earnings on TC basis showed a significant increase from 2011, where earnings for 2012 was at a fairly satisfactory level. The positive trend has continued into 2013.
 
3.3 VLGC
This segment is defined as fully refrigerated LPG ships of 75.000 - 85.000 cbm. Solvang has two Panamax VLGC ships of 75,000 cbm and one VLGC of 82.000 cbm, which are marketed by IGC.

The Panamax VLGC’s are purpose built for transporting LPG from the Atlantic Ocean and Gulf of Mexico to the west coast of Central America. As a result of these features, the Panamax VLGC’s   have achieved better earnings than the VLGC fleet in general in 2012. The “Clipper Victory” commenced a five year TC in August 2011, while the “Clipper Sirius” is on TC to January 2014.

The 82,000 cbm VLGC “Clipper Sun” is on a TC until September 2016.

The group also have two VLGCs of 84.000 cbm under construction at Hyundai Heavy Industries in South Korea, with delivery in June and December 2013. A lot of development work has been done in order to create the most energy efficient vessels possible, with changes including hull shape, propulsion technology, antifouling technology and cargo systems. Furthermore, the newbuildings are the first LPG carriers in the world with fully integrated exhaust gas cleaning system for both the main and auxiliary engines. This means that the ships comply with all existing environmental standards in Emission Control Areas (ECA) in 2015, and the new expected global standards in 2020.