Vinashin breaks into VLCC market

Vietnam’s largest shipbuilder Vinashin will build two VLCCs for state oil group Petrovietnam, the first of its type to be built in Vietnam, for delivery around 2010. In addition, the shipbuilder has reportedly won another Petrovietnam contract to build three 105,000 dwt tankers at a cost of $60-65 million. The first of these Aframax vessels could be in service by the end of 2008, while the other two could be sailing a year later.

The government wants transportation coverage for all domestic oil shipments and 30% of international oil exports. The country aims to compete with North Asian shipyards as well as meet extra demand for oil shipments as it boosts its crude production and builds new refineries. The VLCCs are scheduled to be built at the company’s yard in Dung Quat, in central Vietnam, next to the country’s first oil refinery expected to operate from 2009.

Vinashin says the firm would have to invest heavily in production facilities to accommodate the construction of a VLCC, as at the moment it could only build vessels of up to 105,000 dwt. Industry sources say that, with the right resources, Vietnam can compete as an alternative to China and South Korea.