China to start delivering 12 oil ships to Iran

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, 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 might lower due to 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 tons is named "Safe". A second executive, with direct knowledge of the delivery program, 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 was privatized 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. 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.