SFL Corp Adds Dual-Fuel VLAC and Boxships in $365M Order

SFL Corporation Ltd. has finalized orders for three newbuilds, comprising two 8,800 TEU container vessels and one 93,000 cbm dual-fuel Very Large Ammonia Carrier (VLAC), in a deal valued at approximately $365 million. The move represents a strategic pivot toward securing long-term revenue streams through high-specification assets in both the liner and gas sectors.

Operational and chartering details

The container ships, set for delivery in 2027, have been committed to an eight-year time charter with a major liner operator. This agreement includes a profit-sharing mechanism and extension options for up to four years, alongside purchase options at years eight, ten, and twelve. The VLAC, scheduled for a 2028 delivery, is fixed to a global commodities leader for a minimum of five years, with potential extensions and a structured sale option during the final two years of the charter.

Market implications

The dual-fuel capability of the VLAC signals a calculated bet on the future of ammonia as a marine fuel and a seaborne commodity. By layering in profit-sharing and purchase options across these charters, SFL is effectively mitigating the capital expenditure risk inherent in newbuilding programs while maintaining upside exposure to volatile freight and charter markets. The inclusion of these specific purchase options suggests the charterers are prioritizing long-term asset control, likely as part of broader efforts to secure future-proofed tonnage for decarbonization roadmaps. This $333 million boost to the company’s fixed-rate charter backlog provides a significant hedge against cyclical downturns in the container and gas shipping segments.