Iran Plans Listing NITC to Fund Fleet Modernization

Posted by Eric Haun
Friday, January 22, 2016
Photo: NIOC

Iran plans to list its national tanker company to raise badly needed cash to upgrade its massive fleet and replace older vessels, as the middle east country prepares for an aggressive return to the global oil market.

 
The country emerged from years of economic isolation last weekend after crippling sanctions were lifted in return for Tehran complying with steps to curb its nuclear ambitions.
 
Iran has one of the world's biggest tanker fleets, but many of the ships are ageing and require valid insurance, testing, inspection and certification, known as ship classification, to be able to ply international waters again.
 
Nasrollah Sardashti, the commercial director of the National Iranian Tanker Company (NITC), said his company was in talks with all leading insurance and classification firms, including Lloyds, DNV GL and Bureau Veritas.
 
"We are in talks with insurance and with classification societies (and) ready to class our ships," he said by telephone from Tehran.
 
Shipping sources say NITC has more than 40 tankers out of a fleet of around 70, that are new and modern enough to export oil once they receive classification, which could be achieved within weeks.
 
But the years of sanctions mean that Iran needs cash to modernize 20 large tankers within the next 2-3 years in what would be one of the biggest shipping orders of the past years, worth up to $1.5 billion based on average prices for new tankers.
 
To raise money, Tehran is planning a public listing of NITC.
 
"We are planning to list NITC first on local exchanges and then we will go for overseas listing to raise funds," said Sardashti, adding that it still needed to obtain board approval.
 
Iran has the world's fourth-biggest proven oil reserves but its exports have slumped from a pre-sanctions peak of over 3 million barrels per day (bpd) to little over 1 million bpd as the restrictions left it with only a few customers, largely in Asia.
 
Big Party
In a depressed global shipping sector, Iran offers a rare business opportunity.
 
And in a sign of this appetite, foreign shippers and brokers flocked to Tehran last week to attend NITC's 60th birthday party on January 17.
 
"650 people attended the anniversary, 350 from Iran and 300 from overseas. Almost all international shipping companies and brokerage firms were there," said Sardashti.
 
NITC says it has a fleet of 69 tankers, 66 of which are crude carriers, with a total of 15.5 million deadweight tonnage (DWT).
 
"We don't have any plan to expand the size but we do have the plan for fleet renewal to replace some of the older ships," Sardashti said.
 
Shipping sources estimate NITC's needs to replace over 20 tankers, including Very Large Crude Carriers (VLCC) capable of carrying 2 million barrels of oil, and Suezmax tankers capable of carrying 1 million barrels.
 
"We need approvals and then we start placing orders in 2016... it takes 2-3 years to take delivery of ships," Sardashti said.
 
Delivery of relatively new second-hand vessels would be much faster, possible within two months.
 
In Iran's tanker fleet, 11 VLCCs and Suexmaxes were built in 1999 or earlier, according to the Equasis shipping database. A further 10 were built in 2000.
 
Although all the tankers are double hull and comply with international regulations, they are getting old as the life of a trading VLCC is 15-17 years.
 
Shipping sources said most South Korean ship builders, including Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries, would likely bid for new contracts.
 
Yards in China that could participate include Dalian Shipbuilding and Shanghai Waigaoqiao Shipbuilding.
 
Current prices for a new VLCC is $93-$94 million, according to shipping broker Clarkson.
 
Beyond a potential listing, Sardashti said that he hoped NITC would receive 70-80 percent international financing for fleet modernization either from European or Asian lenders.
 
But Iran could still face legal uncertainties. These include a lack of a dollar clearing, the absence of an established mechanism for non-dollar sales, insufficient clarity on ship insurance and a reluctance of banks to provide letters of credit to facilitate trade with Iran.


(By Nidhi Verma and Keith Wallis; Writing by Henning Gloystein; Editing by Ed Davies)

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter June 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Northern Lights Opens Branch Office in Louisiana

Marine power generation and climate control products manufacturer Northern Lights has opened its fifth branch office, in Kenner, La, to enhance service to Gulf

Sevan Marine Divests Stake in KANFA Aragon

Sevan Marine ASA said it has disposed 50 percent of its stake in KANFA Aragon AS to Sembcorp Marine Ltd. for cash consideration of NOK 20 million, representing

EU to Accept Antitrust Offer from Maersk, MSC, 13 Others

World No.1 container liner Maersk, Swiss peer MSC and 13 other shipping firms are set to escape possible penalties as EU antitrust regulators plan to accept their offer to end a five-year probe,

Ship Repair & Conversion

Wärtsilä, Zamakona Yards Join forces in Canary Island

Wärtsilä is enhancing its service offering by participating in a new maintenance hub in the Canary Islands. The facility, operated by one of Spain's biggest shipbuilding and ship repair groups,

Cathelco Supply BWT System for Cable Laying Vessel

Cathelco have supplied a ballast water treatment (BWT) system for the C.C. Pacifique, a steel barge which is being converted into a cable laying vessel for Coastal Carriers BV of the Netherlands.

Turkey to Modernize Pakistan’s Subs

The Turkish defense firm Defense Technologies and Engineering (STM) won the tender to modernize Pakistan's submarines against its French competitor DCNS, reports Daily Sabah.

Tanker Trends

Essberger Fleet Moves to Marlink’s Sealink VSAT Service

The Hamburg headquartered John T. Essberger (JTE) Group will migrate the primary communication systems of its entire fleet to Sealink, Marlink’s global maritime broadband VSAT service.

China's Robust Crude Oil Imports Mask Changing Fuel Dynamics

China is a bigger concern for crude oil and products markets than the current worries about the British vote to leave the European Union.   While the news media

Navig8 Chemical Adds New Tanker from Kitanihon

Chemical shipping company Navig8 Chemical Tankers Inc. has taken delivery of its first stainless steel chemical tanker, the Navig8 Sirius, from Japanese shipbuilder Kitanihon Shipbuilding Co.

Finance

Baltic Index Rises for Fifth Consecutive Session

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, rose on Tuesday for a fifth straight session on stronger demand across all vessel segments.

Singapore Exchange, Baltic Exchange Continue Transaction Talks

Singapore Exchange (SGX) has agreed with the Baltic Exchange Limited (Baltic Exchange) to extend the period of exclusive discussions regarding a cash offer for

Hanjin to Return 38 Vessels Next Year

Hanjin Shipping is planning to return a total of 38 chartered vessels once their contracts end as part of its restructuring efforts, reports the Korea Herald. A

Energy

China's Robust Crude Oil Imports Mask Changing Fuel Dynamics

China is a bigger concern for crude oil and products markets than the current worries about the British vote to leave the European Union.   While the news media

EU to Accept Antitrust Offer from Maersk, MSC, 13 Others

World No.1 container liner Maersk, Swiss peer MSC and 13 other shipping firms are set to escape possible penalties as EU antitrust regulators plan to accept their offer to end a five-year probe,

Charting the Shift of Oceanic Boundary Currents

Global warming results in fundamental changes to important ocean currents. As scientists from the Alfred-Wegener-Institute show in a new study, wind-driven subtropical

News

Northern Lights Opens Branch Office in Louisiana

Marine power generation and climate control products manufacturer Northern Lights has opened its fifth branch office, in Kenner, La, to enhance service to Gulf

Sevan Marine Divests Stake in KANFA Aragon

Sevan Marine ASA said it has disposed 50 percent of its stake in KANFA Aragon AS to Sembcorp Marine Ltd. for cash consideration of NOK 20 million, representing

First MAN D2676 Workboat Engine Ready for Launch

Last December, MAN Engines introduced its latest generation in-line six-cylinder engines for workboats. Now the first MAN D2676 LE443 engine off the production

Vessels

First MAN D2676 Workboat Engine Ready for Launch

Last December, MAN Engines introduced its latest generation in-line six-cylinder engines for workboats. Now the first MAN D2676 LE443 engine off the production

Essberger Fleet Moves to Marlink’s Sealink VSAT Service

The Hamburg headquartered John T. Essberger (JTE) Group will migrate the primary communication systems of its entire fleet to Sealink, Marlink’s global maritime broadband VSAT service.

Multraship’s New ASD Tugs Named in the Netherlands

Two Damen ASD 3212 tugs for towage and salvage specialist Multraship have been named on June 24 at Terneuzen, the Netherlands.   The Multratug 29 and Multratug 30,

Government Update

China's Robust Crude Oil Imports Mask Changing Fuel Dynamics

China is a bigger concern for crude oil and products markets than the current worries about the British vote to leave the European Union.   While the news media

EU to Accept Antitrust Offer from Maersk, MSC, 13 Others

World No.1 container liner Maersk, Swiss peer MSC and 13 other shipping firms are set to escape possible penalties as EU antitrust regulators plan to accept their offer to end a five-year probe,

EU to Accept Antitrust Offer From Maersk, MSC, 13 Others

World No.1 container liner Maersk, Swiss peer MSC and 13 other shipping firms are set to escape possible penalties as EU antitrust regulators plan to accept their offer to end a five-year probe,

 
 
Maritime Careers / Shipboard Positions Naval Architecture Offshore Oil Pipelines Pod Propulsion Port Authority Ship Repair Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1530 sec (7 req/sec)