Another seven very large crude carriers (VLCCs) are scheduled for delivery by the end of this year from two Chinese shipyards, and the remaining four are expected to be commissioned by the end of 2013 in a total contract worth $1.2 billion (752 million pounds), industry executives told Reuters.
The new tankers would add much-needed capacity to NITC’s fleet at a time when the number of maritime firms willing to transport Iranian crude has dwindled significantly amid tighter western sanctions. This has forced Asian oil buyers to rely more on Iranian-owned tankers.
“These new tankers now carry more weight in this sanction environment,” said a Beijing-based oil executive with knowledge of these ships, adding that the first tanker with a capacity of 318,000 deadweight tonnes is named “Safe”.
The EU will prohibit European insurers and reinsurers from indemnifying tankers carrying Iranian crude oil anywhere in the world from July, threatening to curtail shipments and raise costs for major buyers like China, India, Japan and Korea.
India, Japan and other top Iran oil buyers are hoping their governments will step in and provide sovereign guarantees to allow Asian insurers to replace lost European coverage. Another option to keep the flow of Iranian oil to Asia would be for the OPEC member to provide the maritime insurance for shipments.
A second executive, with direct knowledge of the delivery programme, said the western sanctions have not impacted the shipbuilding contract with Iran as payments from NITC so far have been received without much problem, though the full payment was not due yet.
The 12 new VLCCs, together capable of transporting 24 million barrels of crude, will significantly expand NITC’s tanker fleet of 39 ships.
The 12 vessels were commissioned at Waigaoqiao Shipbuilding Co. Ltd, a unit of China CSSC Holdings Ltd based in financial hub Shanghai, and Dalian Shipbuilding Industry Co. Ltd, based in northeastern port Dalian.
Each builder won an order for six vessels, with the total order financed mostly by China’s Export and Import Bank, officials said, a policy bank that funds China’s massive trade business and Chinese firms’ overseas investment.
The Iranian firm has by now settled more than two-thirds of the $600 million bill with at least one of the two shipyards, said the second executive, who declined to be named due to the sensitiveness of the matter.
NITC, formerly known as the National Iranian Tanker Company, was privatised in 2000 and is now owned by three Iranian pension funds. It operates a fleet of 39 vessels including 25 VLCCs, one of the world’s biggest crude oil transporters.
Some of its tankers are being used as floating storages as Tehran struggles to market its 2.6 million barrels per day crude exports as buyers cut back on imports.
Most of NITC’s ships were built in South Korea and carry flags of Cyprus or Malta, according to the company website. (www.nitc-tankers.com/fleet.html).
This is not the first time NITC has built crude carriers in China. Between 2002 and 2004, five VLCCs were commissioned in China’s Dalian, the company posted on its website.
(Editing by Himani Sarkar and Randy Fabi)
