Cobas AM: Nueva Gestora de Francisco García Paramés

If you move, please, to the second bullet. We are so excited to announce our agreement this week to contract to build 3 LNG fuel, dual-fuel VLCCs from top-tier Korean shipyard, DSME, for delivery in early 2023. This project puts Seaways on our future path. It enables us to achieve a number of critical strategic objectives.

First, adding these vessels to our fleet on 7-year time charters to market-leading customer, Shell, provide strong, stable cash flows with added upside. We are pleased to once again renew our fleet at the cyclical low and to access very competitive financing, combined with a favorable payment schedule, which Jeff will detail further on the call. 

Second, these VLCCs being 40% more efficient than a 10-year-old vessel and 20% more efficient than the most modern ECO VLCCs on the water today. We expect they will remain well suited to adhere to future environmental regulations throughout their lives. Importantly, these are highly efficient ships that will not just surpass today's IMO Energy Efficiency Design Index but will also substantially outperform the 2025 EEDI targets. The environmental benefits of these 3 ships substantially reduces our carbon footprint and are in keeping with our commitment to ESG-focused corporate citizenship. We're proud to continue to be at the forefront of sustainability initiative in the maritime sector. This builds on our last year's signing of the first sustainability-linked refinancing in the industry. 

1/4 of the existing VLCC fleet is now at least 15 years old and 8% is already over -- is at least 20 or over, representing the entire VLCC order book. Another 13 Vs will reach 20 years old in 2021. As we have highlighted consistently, once vessels reach the age of 15, they are more expensive to operate. They have significant investment requirements to continue to trade. As ships reach their ballast water treatment deadlines, even greater capital investment is required to keep them trading. Based on these dynamics, the potential for recycling has been building.

Yes. I think what you're getting to is, every owner has to really look carefully at buying secondhand at the newbuildings -- I mean, because to your point, Bill mentioned earlier and these regulations are -- you think you'll have a handle on of change. Every owner has to assess the ship that we have in our fleet. And part of that, we do buy all these new efficiency programs that we have ongoing and scraping the bottoms and putting on slick paints and doing the native ducts to make our existing ships as efficient as possible. 

And absolutely for an owner, as you look at buying a secondhand tonnage, which, of course, International Seaways, I mean, this Bill has built or overseen for OSG, or previous company, over 50 newbuildings. So a bit serendipitous that we have him on running the technical department as we pivot back to embracing this new project. But all the other vessels we bought have been modern secondhand. And for all the owners, you have to weigh the fact that modern secondhand tonnage is going to be the most efficient purchase. And also think about, well, is that the move that you want to make or do you want to invest in a step change? But in today's world, hydrogen and ammonia, there's a lot of conversations, but there's no practical solutions today.