China Delivers First VLCCs to Iran
A Chinese shipyard delivered the first one of 12 supertankers to Iran, giving Tehran extra capacity to transport its oil to Asia.
Industry sources said the arrival of the 318,000 deadweight ton "Panda" in the Persian Gulf in early October will help Iran expand its fleet, which is now very busy with carrying Iranian crude supplies to various destinations across the globe, specially in Asia.
The very large crude carrier (VLCC) left Waigaoqiao Shipbuilding on September 18, Business Recorder reported, adding that the vessel was initially due to sail to Iran in May, but the sanctions delayed its delivery. A second vessel, the Souvenir, is conducting sea trials in China, but it is unclear when it would begin commercial operations.
"The first of Iran's VLCCs is on its way to Iran. It is unclear how the tanker is being insured in light of the Western sanctions, but I'm sure Iran has found a way," said a Singapore-based oil shipping executive who declined to be named as he was not authorized to talk to the media.
Seven more VLCCs are scheduled for delivery by the end of this year, with the remaining four being built in 2013, giving Iran greater flexibility to store and transport its oil.
The 12 new VLCCs, together capable of transporting 24 million barrels of crude, will significantly expand the National Iranian Tanker Company (NITC)'s 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, according to the company website.
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.
The EU imposed a set of sanctions on Iran in July to ban import of Iranian supplies and providing insurance for vessels carrying Iranian crude.
In a move to defuse the sanctions, Tehran offered to use its own fleet for supplying crude to its main customers in Asia. Iran also started providing up to $1 billion of insurance cover to Iranian vessels shipping oil in a bid to keep its crude flowing to its top four customers: South Korea, China, India and Japan.
The four countries, which buy more than half of Iran's oil exports, have continued purchasing Iranian crude irrespective of the EU and U.S. pressures.
Iranian officials have always stressed that the EU decision to impose a ban on Iran's oil supply is ineffective, and added that there are always many customers for Iranian crude.
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