SEOUL, South Korea: Saudi Arabian tanker giant Bahri is set to order very large crude oil carriers (VLCCs) from a large-scale shipyard being developed in the King Salman Complex by International Maritime Industries (IMI) at Ras Al-Khair, with the vessels being built at the dockyard of Hyundai Heavy Industries (HHI) in South Korea.
The order is a follow-up to the latest memorandum of understanding (MoU) for VLCCs, which was signed by Bahri, formerly known as the National Shipping Co. of Saudi Arabia, IMI and HHI during Crown Prince Mohammed bin Salman’s landmark visit to South Korea on June 26-27.
IMI is a joint venture between Saudi Aramco, Bahri, HHI, and Lamprell, an oil rig construction firm based in the UAE. HHI has agreed to increase its equity share in IMI from 10 to 20 percent, with an MoU between HHI and IMI to explore business opportunities in shipbuilding.
“Once Bahri places its order for the VLCCs, HHI will serve as a subcontractor by building the vessel at its yard in Ulsan, South Korea,” HHI told Arab News on Sunday.
“Among the partners of the IMI joint venture, HHI is the only partner capable of building a shipyard and providing the knowledge of building ships in line with international standards.”
The official said Bahri is expected to issue IMI its first order before the end of next month.
“HHI will help facilitate the transfer of knowledge and technology to enable IMI to eventually build VLCCs in Saudi Arabia,” he added.
Abdullah Al-Dubaikhi, CEO of Bahri, said: “Committed to playing a pivotal role in the transformation of the Kingdom into an important regional and global logistics and transportation hub, Bahri has been exploring new horizons for industry cooperation to take its vision forward.”
The latest agreement would strengthen its strategic relationship with IMI and HHI further, he added.
Fathi K. Al-Saleem, CEO of IMI, said: “This agreement further strengthens the business relationship between IMI and its shareholders, as well as contributing to the development of a localized maritime industry.”
IMI, one of the largest facilities in the Middle East and North Africa, can manufacture four offshore rigs, more than 40 vessels, including three VLCCs, and service over 260 maritime products per year.
During the crown prince’s visit to South Korea, Saudi Aramco and its affiliates signed multiple agreements with major South Korean conglomerates, including HHI, on new business opportunities to expand international operations.
The agreements, estimated to be worth some $8.3 billion, cover a wide range of industrial sectors including shipbuilding, refining, petrochemicals, as well as crude supply, sales and storage.
The development of a new shipyard at the King Salman Complex was announced in January 2016 with the signing of an MoU between Aramco, HHI, Bahri and Lamprell.
The shipyard is to be completed by 2021 with an investment of about $4.3 billion.