Great Eastern Shipping orders three oil super tankers

Great Eastern Shipping orders three oil super tankers

Bangalore: Great Eastern Shipping Co. Ltd, India’s biggest private ocean carrier, has ordered three new oil super tankers or so-called very large crude carriers at South Korea’s Hyundai Heavy Industries Co. Ltd for an undisclosed amount. Each crude carrier can carry as much as 318,000 tones of crude oil.

Currently, it costs $ 85-90 million to construct an oil super tanker, according to shipbrokers. The prices of super tankers have crashed from about $160 million prevailing in August 2008 just before the world slipped into recession.

The three ships, to be delivered between January and April 2012, will help Great Eastern re-enter the oil super tanker market which it had exited about two years ago by selling one of its single hull very larger crude carriers.

Currently, only state-run Shipping Corporation of India Ltd, Mercator Lines Ltd and Essar Shipping, Ports & Logistics Ltd, own oil super tankers amongst Indian ship owners.

The deal is a modification of a July 2008 contract that Great Eastern Shipping had signed with the world’s biggest shipbuilder to construct two Suezmax crude carriers with each having a capacity to carry as much as 158,170 tonnes of crude oil. Suezmax carriers are called so because they can transit the Suez canal fully laden.

The relative pricing benefit between the new oil super tankers and the existing two Suezmax contracts prompted Great Eastern to order the three new ships, a spokesperson for Great Eastern said.

The increasing utilization of this class of vessel by two of the fastest growing economies- India and China- also led to the modification of the shipbuilding contract with Hyundai, she said. Oil refiners are now seen favoring very large crude tankers to haul crude to cut transportation costs as larger quantities can be shipped at a time.

India is heavily dependant on imported crude for its energy requirements.

Out of the annual requirement of about 150 million tones of crude oil, about 110 mt or 75% is imported. Reliance Industries, owned by billionaire Mukesh Ambani, is one of the world’s biggest hirers of oil super tankers to ship crude to its Jamnagar refinery.

The new contract will boost Great Eastern new ship order book to 8 ships including five dry bulk carriers ordered earlier. The company currently runs a fleet of 32 tankers and six dry bulk carriers.