Vietnam proceeds with expansion of tanker fleet

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Mar. 3 -- Vietnam's Dung Quat Ship Building Co., based in the central province of Quang Ngai, has held a keel-laying ceremony for a long-planned 105,000-tonne Aframax oil tanker.

The 244-m tanker, which is scheduled to be completed during third-quarter 2010, is one of three new ships that will be placed in the service of Vietnam's newly built 140,000-b/d Dung Quat refinery.

In June the Dung Quat refinery also is scheduled to receive a second Aframax oil tanker, slightly smaller at 104,000 tonnes, from Dung Quat Shipping Industry Co.

The two ships appear to be part of a larger 3-ship plan worked out by the Vietnamese government last year to ensure adequate shipping for the new refinery, as well as others under construction or in the planning stage.

Last December Petrovietnam's shipping arm PV Trans said it planned to invest as much as $3 billion altogether over the next 7 years to upgrade its crude and oil product tanker fleet to meet demand from Vietnam's refineries.

At the moment, the Dung Quat facility is the country's only refinery, but Vietnam has set a target to have at least three major refineries by 2013 as part of efforts to reduce product imports.

The Ho Chi Minh City-based company also said it aims to expand its businesses to operating floating storage and offloading vessels for Vietnam's oil producers.

A week before making that announcement, PV Trans secured a $175 million loan from a group of foreign banks led by Citigroup to purchase three 80,000-120,000-tonne Aframax tankers to transport oil for the Dung Quat plant.

In addition to Citigroup, lenders include Calyon Corporate & Investment Bank, Fortis Bank, and Societe Generale, while the 13-year loan was guaranteed by Nippon Export Investment Insurance and Petrovietnam.

In February 2008, ahead of the $175 million loan facility, the Dung Quat Ship Building Co. said it had imported nearly all the steel and other building materials needed to build the three Aframax oil tankers.

At the time, Dung Quat Ship Building Co. General Director Cao Thanh Dong, said each of the three oil tankers would likely cost more than $60 million.

Earlier, in 2006, Dung Quat Ship Building Co. Deputy Director Dinh Tien Dung announced that the American Bureau of Shipping would supervise the construction of three 104,000-tonne oil tankers at the Dung Quat Shipyard.

He said the ABS would work with the Vietnam Registration Department to send supervisors to Dung Quat shipyard to train engineers, manage production quality, and oversee the importation of construction materials.

At the time, plans called for the first ship to be completed in mid-2008 and to be handed over to Petrovietnam for use by the planned Dung Quat refinery.

Contact Eric Watkins at hippalus@yahoo.com.

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