Nordic American Tanker Shipping Ltd. concluded an agreement to charter to Gulf Navigation Company
LLC of Dubai, U.A.E. the first of its modern double-hull Suezmax tankers as of the expiration of the original BP charter in Q4 2004. The five-year bareboat charter agreement, with two optional one-year extensions, provides for a bareboat charter rate of $17,325 per day for the vessel, equivalent to a timecharter rate of approximately $25,000 per day.
Rolf Amundsen, a spokesman for Nordic American, said: "The charter we are announcing today provides a strategic foundation for the future growth of the company. With the fixed income from this ship, we believe that we have significantly reduced the market risks to our company and made it more attractive to operate the rest of our fleet in the spot, or short-term market. As we move ahead in anticipation of the expiration of the present charters in Q4 2004, it is the plan of the Nordic American Board
to grow our fleet. We believe that having a portion of our fleet on fixed rate charter reduces the market rates we need to receive on the remainder of the fleet to achieve cash breakeven, and gives us confidence that we can maintain a dividend while chartering the remainder of the fleet at variable or shorter term rates, which, while volatile, may from time to time be much higher. We are very excited about our cooperation with Gulf Navigation and have solid plans to develop further business."