Expansion of Middle East fleets goes on apace as more self-sufficiency is sought to cover expanding crude, chemical and products exports. At a steady rate, high-specification newbuildings are being ordered and quality secondhand tonnage acquired, reads an article published in Tanker Shipping & Trade journal.
The major talking point centers on Iran and a planned newbuilding program for National Iranian Tanker Company (NITC). The company plans to seek a stock exchange listing on the local exchange and then overseas in an effort to raise cash for a badly needed tanker fleet renewal. There will be no shortage of shipbuilders and owners seeking to do business with NITC but the question of payments remains. NITC currently has a fleet of 69 tankers, of which all but three are crude carriers.
From this total NITC needs to replace over 20 relatively ageing VLCCs and Suezmaxes, which will require a huge newbuilding program. South Korean and Chinese builders are queuing up for potential business, but it seems likely that payment will be on a barter basis with a combination of oil and cash. Oil will form the biggest part of the payment.
For its ambitious renewal plans, NITC hopes to receive 70-80% of financing from abroad. The bidding yards are likely to be Hyundai, Daewoo and Samsung, while Dalian Shipbuilding Industry Company and Shanghai Waigaoqiao are also understood to be interested. NITC has already indicated that 20% down payments on newbuildings will be financed by state-to-state oil dealings.
Building slots for deliveries in 2018 and 2019 are already being reserved in anticipation of much-needed business to counter the current newbuilding drought. Some orders are expected to materialize by the end of summer 2016. Moves have been made to order construction of five crude oil tankers at the home yards Sadra Company and Iran Shipbuilding and Offshore Industries Complex Co.
Other yards in the country will overhaul and modernize existing ships, providing local employment. NITC is still experiencing problems with classification bodies and insurance, but the situation is improving slowly. Some VLCCs and Suezmaxes have returned to trading to China.
European business has not yet resumed. In one case a lapsed contract at SPP Shipbuilding for 10 34,000 dwt bulk carriers is negotiating into the same number of medium range product carriers. The vessels, ordered in 2008 at $40 million apiece, perished when sanctions were imposed. A 15% deposit had been made on the original bulk carriers. Frustrated by lengthening delays over administrative matters, NITC entered the secondhand market and purchased the 2001-built crude oil Aframax Nissos Kythnos for $39 million. The deal is subject to winning a tender from ENAP, Chile, for imports of crude.
