Saudi orders VLCC pair from Hyundai

The National Shipping Company of Saudi Arabia (NSCSA) has placed an order with Hyundai Heavy Industries, the worlds? largest shipbuilder, for two VLCC tankers in response to increases in oil production which has boosted supertanker prices.

Oslo-based shipbroker Fearnleys AS said that Hyundai won the order because of the early delivery slot it could offer for the two oil carriers to be delivered in 2007 for $102 million each, the highest price for this ship type since 1992.

“We are expanding our fleet as oil demand increases and OPEC boosts its oil output capacity drastically over the next 15 years,” Khalil Gannas, chief executive officer of the Riyadh-based private shipping company said. Demand for crude-oil tankers has surged this year, boosting shipping rates, as the Organization of Petroleum Exporting Countries (OPEC) pumps near capacity to help lower oil prices that reached almost $50 a barrel.

This is NSCSA?s first VLCC order from Hyundai, Gannas said. Hyundai is currently building six petrochemical tankers for the National Chemical Carriers, a unit of the Saudi company. The six tankers, which cost $213 million, will be delivered next year.

NSCSA, in which the Saudi Government has a 29%, signed a letter of intent with Hyundai and didn’t invite companies to bid for the order because few shipyards have free berths to build these ships by 2007.