Singapore owner on course for VLCC newbuilds

Plans for 12 VLCC newbuildings by Singaporean oil trader Hin Leong Trading Pte. Ltd. and its tanker unit Ocean Tankers (Pte) Ltd. are going ahead despite a global economic slowdown. Hin Leong director Evan Lim said that the company “is on track to take delivery of all 12 VLCCs by 2012” from Shanghai Waigaoqiao Shipyard (SWS). Lim said that “banks are currently not forthcoming with finance for tanker newbuilding projects” but pointed out that Hin Leong’s purchase of the dozen VLCCs through Ocean Tankers was finalised “some time ago already”. Lim added that there will be no delays or cancellations to the entire order.

The first of the dozen newbuilds, the 318,000 dwt Hua San, has been delivered to Ocean Tankers, which will reportedly be chartering it out to a Chinese state-owned oil firm. Each VLCC newbuild reportedly costs some $115 million, a very competitive figure compared to prices at Korean yards.

Despite the economic turndown, demand for crude oil in China showing no sign of abating and it is anticipated that this market will require another 40 to 50 VLCCs in the next five years. Data based on China’s GDP growth of 10% per year indicates that the country will need to increase crude oil import volumes by 8%.