Dorian LPG’s $349m VLGC spree: fleet recycling or growth play?
New York-listed owner ties three 88,000-cubic-metre gas carriers to Hanwha Ocean in a deal analysts call cash-neutral.
Dorian LPG, the New York-listed shipping company, has been identified as the likely buyer behind a major newbuilding contract at South Korea’s Hanwha Ocean. The deal, valued at KRW 477.8 billion ($345 million), covers three very large gas carriers (VLGCs) with a capacity of 90,000 cubic metres each. While Hanwha initially described the customer as an Oceania-based owner, shipbroking sources have since linked the order to Dorian, led by CEO John Hadjipateras. The vessels are scheduled for delivery by December 6, 2030.
The order aligns with Dorian’s ongoing fleet renewal strategy. In June, the company placed an order for a 90,000-cubic-metre dual-fuel Panamax VLGC at HD Hyundai, priced at approximately $115 million, with delivery set for July 2029.
Meanwhile, Dorian has taken advantage of strong secondhand market conditions, selling four older VLGCs this year. The 2014-built Corsair was sold for $81.8 million, while the 2015-built Constellation and Clermont fetched $87.3 million and $91 million, respectively. Dubai-based SPM Shipping acquired the Clermont, with the four sales generating over $340 million in total proceeds.
Hanwha Ocean
Analysts at SEB have pointed out that if Dorian is confirmed as the buyer, the $345 million cost of the Hanwha order would be almost entirely offset by the proceeds from these disposals. This would make the transaction a near cash-neutral fleet recycling effort, allowing Dorian to modernise its fleet without a significant draw on its balance sheet.
Dual-fuel technology and financial strategy: Dorian LPG
The three new VLGCs will be equipped with dual-fuel engines capable of running on liquefied petroleum gas (LPG) and conventional low-sulfur fuels. They will also feature shaft generator systems to provide onboard power during voyages, along with energy-efficient hull designs and propulsion systems. These advancements reflect industry trends toward greater sustainability and operational efficiency.
Dorian’s relationship with Hanwha Ocean is well-established. The shipyard delivered the dual-fuel VLGC/VLAC Areion to the company in March, and as of early August, Dorian’s fleet included 25 modern VLGCs. The financial backing for the new order is robust: on September 2, Dorian secured a seven-year, $368.4 million credit facility. The package includes a $213.4 million term loan, a $155.1 million revolving credit facility, and a $200 million accordion facility to support future growth.
The market response to the announcement has been modest but positive. Hanwha Ocean’s shares closed 0.35% higher at KRW 86,800 on the Korean Stock Exchange, while Dorian LPG’s stock edged up 0.06% to $53.60 in pre-market trading on the New York Stock Exchange. With global gas trade expanding and environmental regulations tightening, Dorian’s investment in efficient, dual-fuel vessels positions the company to meet future demand while maintaining financial flexibility.
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