Performance Shipping and Mercuria Energy Trading announced the signing of an extended time charter for their fourth newbuilding tanker, an LR1 tanker to be delivered in mid-2027.
The details of the LR1 oil agreement
This contract establishes a gross daily rate of US$23,750, with a fixed term of four years and the possibility of extension for an additional three years. If these options are exercised, a staggered increase in the daily rate is contemplated: US$850 for each of the first two optional years and US$1,200 for the third, subject to mutual agreement.
Moreover, the contract is estimated to generate stable revenues above the operating break-even point, strengthening the new vessel’s free cash flow. With this addition, Performance Shipping ‘s secured revenue portfolio reaches approximately US$255 million.
We are very pleased to enter into a new partnership with Mercuria, a leading global independent energy and commodities group, which reinforces the trust charterers place in us and our commitment to building long-lasting relationships.
With this contract, our fleet-wide guaranteed revenue portfolio increases by approximately US$35 million, bringing the total to approximately US$255 million, based on the minimum duration of each charter and as of the close of the most recent financial reporting period.
By signing this contract, we further extended our fixed-charter coverage, thereby reducing the cash flow break-even point required on our open-door days.
Andreas Michalopoulos, Chief Executive Officer of the Company.
The Mercuria transaction is part of a larger strategy to secure predictable revenues through long-term contracts. Such a vision allows Performance Shipping to move forward with confidence in the expansion of its modern fleet. modern fleet and its participation in international seaborne trade.
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Source and photo: Performance Shipping
