Islamic Republic of Iran Shipping Lines and Iranian Offshore Oil Co. have reached preliminary deals with South Korean shipyards for orders valued at roughly $2.4 billion, people involved in the talks said Tuesday.
The agreements are part of Iran’s efforts to make a comeback in global shipping after the lifting of international sanctions earlier this year, but completing the orders will depend on financing that the Iranians haven’t yet secured, the people said.
“The yards are making slots available to the Iranians starting in 2018 and 2019,” one of the people said. “The Iranians are trying to make the 20% down payments through oil state-to-state deals to finalize the orders.”
If the oil deals work out with the South Korean government, Seoul can then give the necessary guarantees for the down payment to the yards.
A second person said other options for down payments are being discussed and that he expects the orders to be completed by the end of the summer.
Islamic Republic of Iran Shipping Lines, known as IRISL, operates a fleet of container vessels, bulk carriers and tankers. It has signed a memorandum of understanding with Hyundai Mipo Dockyard, a subsidiary of shipbuilding company Hyundai Heavy Industries Group, for as many as 10 petroleum-product tankers and at least six so-called handysize bulk carriers.
Product tankers cost about $30 million each and handysize bulkers about $20 million apiece.
IRISL also is in talks with Hyundai Heavy for as many as six, 14,500-container ships, the people involved in the talks said. China’s Dalian Shipbuilding Industry Co. is in the race for the order as well, the people said.
IRISL operates about 115 oceangoing vessels, with a total capacity of 3.3 million deadweight tons. But a number of the ships are old, have been declassified—or deemed unsafe to travel—and can’t be insured.
“As they modernize their fleet, the Iranians are chartering vessels from Greek and other owners to move cargo,” a third person said. “Chartering will continue to be a big part of their operations for at least another three years.”
Iranian Offshore Oil Co., a subsidiary of state oil giant National Iranian Oil Co., is in advanced talks for firm orders of at least five jack-up rigs with Daewoo Shipbuilding & Marine Engineering Co. at roughly $205 million each, the second person said.
“There is a [memorandum of understanding] in the works with DSME, but IOOC is also looking at other yards,” the person said. “Rig orders are rare these days as oil prices are low and offshore drilling is expensive, so there will be a race among major yards for the order.”
Senior South Korean and Chinese yard officials have visited Tehran in recent months to secure shipping deals, the first person said, as international orders are drying up on a glut of tonnage in the water and anemic global economic growth.
Source: Wall Street JournalPrevious Next