FRO – Sale and Purchase of VLCC Newbuildings

28.06.2006

Frontline has as reported in the Company’s First quarter report ordered four VLCC new buildings at Jignan Shipyard in China for delivery 2009 and onwards.
 
Two of these originally newbuilding contracts have in the second quarter been sold to third party including an element of profit. Frontline has subsequently to this sale entered into further two newbuilding contracts including an option for an additional two new buildings.
 
Frontline will after this have the following VLCC new building program
 
Ship                                                       Yard                                                          Delivery                                
VLCC newbuilding                               Nantong Cosco Khi Ship Engineering                    2006
VLCC newbuilding                               Nantong Cosco Khi Ship Engineering                    2006
VLCC newbuilding                               Jiangnan Shipyard, PRC                                     2009
VLCC newbuilding                               Jiangnan Shipyard, PRC                                     2009
VLCC newbuilding                               Jiangnan Shipyard, PRC                                     2010
VLCC newbuilding                               Jiangnan Shipyard, PRC                                     2010
Option for 2 VLCC newbuildings           Jiangnan Shipyard, PRC                                  2010/2011
 
 
Frontline has also increased their exposure to the VLCC market trough chartering in two double hull VLCCS from Knightsbridge Tankers Ltd. for a five year period. These charters commence in 2007.
 
The rational behind these decisions is a firm belief that the underlying supply /demand balance for VLCCs will remain tight for the period to come. This tight balance will be driven by the phase out of single hull tonnage as well as increased transportation volume and longer average transportation distances. 
 
June 27, 2006
The Board of Directors
Frontline Ltd.
Hamilton, Bermuda