SFL locks in $333m charter cover on $365m newbuild trio

SFL Corporation has agreed to acquire three newbuildings for around $365m, with long-term employment already secured that will add at least $333m to its fixed-rate charter backlog. The New York-listed, John Fredriksen-backed shipowner disclosed the deal covering two 8,800 teu containerships and one very large ammonia carrier (VLAC), all contracted out before a single hull hits the water.

The containerships are scheduled for delivery in 2027. The VLAC, a 93,000 cu m dual-fuel unit, follows in 2028.

Who has chartered the ships?

The two boxships have been fixed to an unnamed major liner operator on minimum eight-year charters, with extension options running another four years. The liner also holds purchase options at the end of years eight, 10 and 12, plus profit-sharing arrangements built into the agreements.

The VLAC goes a different route. A major commodities group — again unnamed — takes the carrier on a minimum five-year charter, extendable by two years. That charterer can also trigger a vessel sale during the final two years of the firm period, subject to profit sharing.

SFL has not identified the charterers, the vessel sellers or the shipyards involved in any of the transactions.

How big is the backlog now?

The latest agreements take SFL's additions to its fixed-rate charter backlog this year to more than $1.6bn. That figure stacks on top of an already busy autumn for the Fredriksen vehicle.

Earlier this month, SFL moved into the VLAC segment, ordering two 93,000 cu m dual-fuel vessels for about $216m and securing long-term charters with a European investment-grade oil major worth at least $162m. The new 93,000 cu m VLAC announced now deepens that ammonia exposure.

The container side has grown too. In September, SFL secured $750m in additional contracted revenue by renewing charters on six 15,400 teu vessels with Hapag-Lloyd for seven years, keeping those ships employed through 2035 and 2036.

Where is the money coming from?

Older tankers are funding the pivot. In early October, SFL agreed to sell four LR2 product tankers and three suezmaxes to commodities trader Trafigura, a transaction expected to generate approximately $275m in net cash proceeds and a $175m book gain.

SFL bought those seven vessels in 2021. The disposals mark another stage in the company's shift toward contracted shipping assets — younger tonnage, long fixed-rate employment, less spot-market exposure.

What does it mean for the market?

For liner operators, deals like this signal continued appetite for mid-sized modern tonnage locked in on multi-year terms rather than short period fixtures. An eight-year minimum commitment with purchase options at years eight, 10 and 12 gives the charterer a path to ownership while keeping the operator's balance sheet clean in the interim.

For forwarders and shippers, the ammonia side matters more. Another 93,000 cu m dual-fuel VLAC under a five-year commodity-house charter adds contracted capacity to a fleet segment still being built out for the ammonia trade, which carriers and traders expect to scale through the decade.

For SFL itself, the arithmetic is the story: $365m of new assets matched with $333m of minimum contracted revenue, on deals that push 2024's backlog additions past $1.6bn, all funded partly by a $275m cash injection from Trafigura tanker sales. Expect SFL to keep recycling older tonnage into contracted newbuilds as long as charterers keep signing multi-year commitments at these levels.