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Report: Iran Ordering USD 2.4 Bn Worth of Ships in Korea

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  • As Bahri Seals USD 126 Mn Loan for VLCC Duo

Iran has been linked to shipbuilding orders worth up to USD 2.4 billion at South Korean yards, providing them with the much-needed boost as they scramble for new orders.

Specifically, Islamic Republic of Iran Shipping Lines (IRISL) and oil producer Iranian Offshore Oil Co. (IOOC) are said to have reached preliminary agreements with Korean shipbuilding majors for which Iranian firms are yet to secure required financing, the Wall Street Journal writes citing officials close to the matter.

As disclosed, the Korean yards are expected to start building the ships in 2018 and 2019, with Iranians  targeting to make 20% down payments through oil state-to-state deals to finalize the orders.

IRISL has reportedly signed a memorandum of understanding (MoU) with Hyundai Mipo Dockyard for up to 10 petroleum-product tankers and at least six handysize bulk carriers.

Previously, Iran voiced its plans to inject an investment worth USD 2.5 billion to upgrade its oil tanker fleet as it gears up to restore pre-sanction shipping links.

The company is also said to be negotiating an order for up to six 14,500 boxships with Hyundai Heavy Industries (HHI), the Wall Street Journal adds.

Separately, Daewoo Shipbuilding & Marine Engineering Co (DSME) is reported to be in advanced talks to sign an MoU for at least five jack-up rigs worth at around USD 205 million each.

The post-sanction cooperation between the two nations has also seen DSME sign a business agreement on operation and technology instruction with the Iranian government for Iran Shipbuilding & Offshore Industries Complex Co. (ISOICO).

The deal paves the way for DSME to share its technology and conduct consignment management on the Iranian shipbuilder.

The move is triggered by Iran’s desire to modernize its aging dockyards and build bigger ships especially on the back of the lifting of sanctions against the country since January this year.

In addition, earlier in May, Korean Register (KR) inked a Memorandum of Agreement to establish a joint venture company with the Iranian Classification Society (ICS).

The company will be called the ‘Iran-Korea Technology Assurance Company’, with 50-50 capital investment from KR and ICS and it is planned to be fully operational in 2017, focusing on delivering of plant facility certification and engineering services.

Moreover, Chinese counterparts are believed to be competing for the contracts as well as representatives from Chinese yards also went to Tehran to try to secure a portion of the ordering spree Iran is expected to embark upon as it pursues modernization of its outdated fleet.

China’s Dalian Shipbuilding Industry Co. is said to be vying for the boxship order.

Meanwhile, the National Shipping Company of Saudi Arabia (Bahri) has secured USD 126 million in financing with the Bank of Tokyo-Mitsubishi UFJ (BTMU) under the terms compliant with the Sharia law.

Majority of the loan, specifically 80 percent, will be used to finance the two tankers Bahri purchased in October, 2015.

The ships in question are two second-hand VLCCs, Blue Topaz and Blue Pearl, built in 2010 at Daewoo Shipbuilding & Marine Engineering Co (DSME) in South Korea for DK Maritime, the shipbuilder’s subsidiary.

The purchase price was set at a total of USD 157 million and the second-hand tankers were delivered to Bahri in the first quarter of this year.

The funding will mature in ten years and will be paid in equal quarterly installments, Bahri said.

At the end of May, Bahri took delivery of the STI Powai, the fifth of five Medium Range tankers bought in February this year. The tanker was subsequently named to NCC Bader.

All five vessels were built in 2014 at Hyundai Mipo Dockyard in South Korea for Scorpio Tankers Inc. They were bought for a total purchase price of USD 166.5 million.

World Maritime News

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WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners

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…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development. 

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA  to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity. 

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years. 

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

Mike Igbokwe (SAN)

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further. 

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA. 

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers. 

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being. 

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained. 

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Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live

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The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: www.maritimefirstnewspaper.com and on Youtube: Maritimefirst Newspaper.

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Wind Farm Vessel Collision Leaves 15 Injured

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…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg. 

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt. 

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital. 

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News

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