(Bloomberg) ? Frontline Ltd., the world?s biggest tanker company, is considering a bid for General Maritime Corp., which has a market value of $1.8 billion, an acquisition that would boost Frontline?s crude-oil shipping capacity by a third.

General Maritime, known as Genmar, is ?a candidate for a potential merger or a marketing joint venture,? Bermuda-based Frontline said in a US regulatory filing. Frontline, which now owns 4.3 percent of the New York-based company, said Genmar Chief Executive Peter Georgiopoulos spurned a December 3 request for talks.

The world?s biggest tanker takeover would boost Frontline?s capacity to about 150 million barrels, or five days of OPEC oil output.

Tanker companies are using record earnings to finance expansion. Overseas Shipholding Group, the largest US-based tanker owner, yesterday agreed to buy Stelmar Shipping Ltd. for $843 million in cash.

?It gives the owners more bargaining power against the oil majors,? said Thomas Soederberg, a director of Tribini Capital, a Hong Kong-based ship finance adviser.

?When you?re looking at doing contracts you have a lot more flexibility. The scope of having a big fleet is a definite issue.?

Oscar Spieler, chief executive of Frontline?s operations division, declined to comment in a telephone interview from Oslo.

Frontline said it hasn?t communicated with Genmar since December 8, when Genmar disclosed that Frontline had bought a stake and said there were no plans for a sale.

Frontline on November 15 forecast fourth-quarter net income of at least $300 million. Record oil-tanker rates since then have led to ?increased confidence? in results for the fourth quarter and early 2005, Frontline said in a release on Hugin.

?We have seen a strengthening of the market,? Spieler said. ?It will be strong numbers. We don?t want to quantify closer.?

Frontline Chairman John Fredriksen, Norway?s richest man, has backing from some Genmar shareholders to integrate the two companies, according to the filing to the Securities and Exchange Commission, made yesterday in New York after the market closed.

Fidelity Investments is the biggest shareholder in Genmar, with a 14.4 percent stake, according to data compiled by Bloomberg.

Boston-based Fidelity is also the largest independent shareholder in Frontline, with 5.8 percent, Bloomberg data shows.

Jon Chappell, an analyst at JPMorgan Chase & Co., said Fredriksen, 60, may be able to run Genmar?s 43 ships more profitably.

The companies could get benefits of $66.5 million if Genmar?s tankers earned as much and operated at the same cost level as Frontline?s, Chappell estimated in December 9 note.

Georgiopoulos, 43, owned at least 7.3 percent of Genmar as of April, Bloomberg data show. Frontline began buying shares in Genmar on October 27, paying between $37.86 and $43.95 each, according to a separate filing.

Frontline said it reduced its stake, which stood at 5 percent or more as of December 3, without giving a reason.

Frontline?s shares rose 16.5 kroner, or 5.4 percent, to 320 kroner in Oslo at 10:05 a.m., after jumping 5 percent in the US yesterday.

The shares have almost tripled in 12 months, valuing the company at 24 billion kroner ($3.9 billion).

Genmar?s shares tripled in the same period.

Genmar closed up $4.15, or 9.5 percent, to $47.95 yesterday in New York. They peaked on December 8 at $50.80. The company has $655 million of debt, according to Bloomberg data.

The Bloomberg Tanker Index, which tracks shares of seven New- York listed tanker companies including Frontline, Genmar, Overseas Shipholding and Stelmar, has more than doubled this year, outperforming all of Standard & Poor?s 132 industry groups.

Fredriksen bought control of Frontline, then a Stockholm- listed company, in 1996.

A series of takeovers ? London Overseas Freighters in 1997, ICB in 1999 and Golden Ocean in 2000 ? made it the world?s largest tanker company. Frontline operates 35 Very Large Crude Carriers, or VLCCs, each able to hold 2 million barrels of oil, and 31 tankers half that size, known as Suezmax vessels.

Genmar has 17 Suezmax and 26 so-called Aframax ships, which can carry about 600,000 barrels of oil each.

VLCCs are earning $98,307 a day this year, 75 percent more than last year, according to Oslo-based broker P.F. Bassoe. Daily earnings may drop by a third next year, a Bloomberg survey of eight analysts showed. Million-barrel tanker earnings have risen 65 percent to $65,637 a day.

Genmar?s Suezmax fleet has earned $1,000 to $9,000 a day less than Frontline?s in the past two years, while operating costs are about $1,000 a day higher, JPMorgan?s Chappell said. Frontline already has a marketing venture with Stamford, Connecticut-based OMI Corp., the world?s No. 3 owner of Suezmax tankers with 15.

A larger market share may help insulate shipowners from any slide in demand.

The cost of shipping 2 million barrels of crude from the Middle East to Japan has fallen about 15 percent from its record high on November 10.

?The good thing about consolidating a market like the tanker market is you get a lot more stability in your rates versus the old fragmented market you used to have with a lot of small owners,? Tribini?s Soederberg said.

New York-based Overseas Shipholding agreed to buy Stelmar for $48 a share in cash, an 8.3 percent premium the December 10 closing price, and assume $457 million in debt, Athens-based Stelmar said in a statement yesterday.