Shipping transportation services provider Performance Shipping has reached a memorandum of agreement to buy a 105,304dwt LR2 Aframax oil product tanker.

The company is executing the deal, which is its first LR2 Aframax oil product tanker purchase, through a wholly-owned unit.

Dubbed M/T Alpine Amalia, the tanker will be acquired from an unaffiliated third party for $36.5m.   

The company is expected to use cash-on-hand raised from its equity offerings as well as the incurrence of debt through a new facility to fund the transaction.

The vessel, to be renamed M/T P Aliki, is slated for delivery in November.

The oil product tanker was built by Hyundai Heavy Industries in Ulsan, South Korea, in 2010.

It features a ballast water treatment system (BWTS) and exhaust gas cleaning system (EGCS).

The vessel’s special survey and drydock is not scheduled until 2025.

Performance Shipping CEO Andreas Michalopoulos said: “The acquisition of our seventh vessel, a long-range Aframax oil product tanker referred to as an LR2, marks yet another significant milestone for our company.

“It marks our entry into the refined petroleum product tanker sector, which we believe enjoys strong fundamentals and prospects.

“Spot charter rates for LR2 tankers are currently averaging in excess of $40,000.00 per day and we expect to trade the vessel, following its delivery to us, in the spot market.”

“We look forward to participating in a strong tanker market with our expanded fleet of seven Aframax tankers and low maintenance capital expenditures going forward,” Michalopoulos added.

At present, Performance Shipping operates its fleet on spot voyages.