NITC closely looking’ at 1st post-sanctions VLCC orders

SHANA – Managing director Siroos Kianersi says any contracts would be for renewal not growth at a time when the owner has opened the door for ‘the right pool partners’.

Shipowning giant National Iranian Tanker Co (NITC) is exploring the potential for placing its first VLCC newbuilding orders since the easing of international sanctions, says managing director Siroos Kianersi.

He also has opened the door for possible consolidation in the VLCC market via pool partnerships with other shipowners and operators.

Kianersi, who was in Oslo this week for Nor-Shipping alongside colleagues from the Tehran-based shipowner, says the company is mindful of the growing tanker orderbook and any newbuilding move would be to replenish rather than enlarge NITC’s owned fleet.

“The newbuilding price is at its lowest and [this] is the best time to renew the fleet,” he told TradeWinds. “We have no intention to expand but are looking closely at ordering ships to renew our fleet and reduce the average age of our vessels.”

NITC, which has been seeking to scrap two of its older VLCCs in the past few weeks, is presently the largest tanker owner in the world with 70 tankers of a combined 15.5 million dwt.

According to data from Clarksons, the newest VLCCs in its fleet were delivered from Dalian Shipyard in China in 2013. It also has built tankers at Shanghai Waigaoqiao Shipbuilding (SWS) in China and at major South Korean shipbuilders, including Hyundai Heavy Industries and DSME.

“Renewal of our older vessels has been planned and the path for this will be ordering direct from yards,” Kianersi said. “Secondhand purchase opportunities are also on our agenda and are also a possibility we may consider.”

VLCC newbuilding activity has picked up this year, with the orderbook topping 100 vessels last week.

With Opec cuts and limited scrapping, coupled with the arrival of new tonnage this year, the tanker market has weakened and NITC expects it to remain soft for now.

“We hope it will improve in the last quarter of 2017 and there will be an improvement in rates for 2018 and 2019 provided owners do not order so many VLCCs,” Kianersi said.

Consolidation has been another hallmark of the big tanker market in 2017, with DHT Holdings buying BW Group’s VLCC fleet and Frontline’s chase for DHT both capturing the headlines.

“Consolidation, of course, has been going on for more than 15 years,” Kianersi said. “Fortunately, it has become more common in recent years and especially the past few months.

“I personally think pooling is good for the tanker market. For sure, we will consider the same with the right partners.”

Growth is on the cards in other areas of the business.

“Outside crude transportation, we are now involved in LPG and chemical transportation and have plans to expand our activity for LPG and chemical transportation,” Kianersi said.

Last year’s easing of sanctions brought NITC firmly back into the international market.

Kianersi says that prior to sanctions, 15% of the company’s fleet was involved in the domestic trade, with 85% trading internationally.

“We would like our clients to know that we, as a private company, gradually intend to take our market share by trading our ships internationally and transport oil and gas worldwide for our clients,” he said.

Once again, all of the fleet has obtained classification from International Association of Classification Societies members, with protection-and-indemnity cover provided by the International Group clubs. The vessels are flying the Panama flag, with hull and machinery cover from major underwriters.

“By doing all this, our ships have started doing oil major inspections and are gradually returning to the pattern of trade we used to do prior to sanctions,” Kianersi said.