NITC Willing to Place Orders With High-Level Domestic Firms

EghtesadOnline: The National Iranian Tanker Company is prepared to expand its fleet using the potential of domestic companies, albeit if they prove their mettle, says the company's chief executive officer.

News ID: ۷۷۳۶۵۸

02 February 2017

"We want to renovate and expand our tanker fleet. Any vessel that will be constructed at home must meet specific standards and requirements," Sirous Kianersi was quoted as saying by Mehr News Agency on Wednesday.

But that seems to be a tall order, as the domestic shipbuilding industry has been unable to live up to expectations over the past decade. According to published reports, NITC awarded the construction of two midsize tankers of 35,000 tons deadweight to a domestic company in 2003. The same year, it signed a contract with Hyundai Mipo Dockyard Co. for three vessels of similar size.

The South Korean company reportedly delivered all of the orders in 11 months, two months ahead of time, but the Iranian contractor has yet to deliver a single tanker after 14 years while it was obliged to build the ships in two years, Financial Tribune reported.

Shipbuilding contracts of state-owned shipping company IRISL with domestic firms have also hit the skids.

IRISL signed a contract with two Iranian companies in 2004-05 for delivery of five tankers, but it received only two, a company official said in December.

Leasing Plans

Kianersi added that the oil price slump over the past two years has hurt NITC revenues, "but we had a reasonable income in the period". He did not provide figures.

Brent, the international crude oil benchmark, fell from its peak level of around $115 per barrel in 2014 to a multiyear-low of $27 last February. Oil has been trading above $50 per barrel in January on the back of a global pact to cut supplies to lift the low prices.

The NITC chief said his company has signed deals with foreign companies for leasing 35 tankers.

NITC operates one of the world's largest tanker fleet ahead of regional rival Saudi Arabia as well as Qatar, Oman and the UAE, according to the United Nations' 2015 Maritime Transport report.

Iran has 42 very large crude carriers (VLCCs), nine Suezmaxes, five Aframaxes and several other ships, with the fleet’s average age at around 8.5 years.

The company also has expanded its tanker traffic in Europe. According to reports, two NITC-owned tankers, namely Huge and Snow, are on their way to the storage and trading port of Rotterdam, the Netherlands, after loading at Kharg Island in January. They are expected to make their arrival in early February.

Iran has steadily reconnected with buyers across Europe since sanctions were lifted a year ago, but thus far buyers in most of Europe have chartered tankers from other companies to move Iran's crude.