Tuesday, April 6, 2010

Three New Oil Tankers For Indian Bulk Shipping Group

GE ' Supersize ' their South Korean Order Book
Shipping News Feature

INDIA – Great Eastern Shipping, the nations largest private sector shipping group, have modified their current order with Hyundai Heavy Industries, upgrading three of the Suezmax tankers (carrying capacity circa 150,000 tonnes) to VLCC status (300,000 tonne plus capacity). The original deal was signed in July 2008 but the changing nature of the markets means it is now economically viable to employ the larger vessels whose build costs are relatively less compared to potential income.

It seems strange to a neutral observer that such a massive order can be so drastically altered mid contract but the sectional construction of the vessels, coupled with the plummeting cost of building such ships, down around $70 million per tanker from the date of the original contract, and the dearth of new orders for the shipyards, presumably make the change possible. Changing to VLCC’s will necessarily obviate the possibility of transit via Suez but the seemingly insatiable thirst of the subcontinent for imported crude oil, over 100 million tonnes per annum, must make the sums add up.

Great Eastern have reportedly got a total of eight new builds on the blocks which, assuming no disposals, would bring their fleet to 35 oil and product tankers plus 11 dry bulk carriers. The 3 VLCC’s should be ready by mid 2012 and mean that the company have re-entered the very large crude carrier market which they abandoned some years ago when they sold their only VLCC the “Vasant J Sheth”.

Photo: A Goliath Crane slots another ship together “on the blocks” at the Hyundai Heavy Industries Yard.