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KOTC to re-tender VLGC order

KOTC to re-tender VLGC order
Kuwait Oil Tanker Company (KOTC) is to re-tender for two VLGCs after only two South Korean yards put in bids, which were considered too high to proceed. These vessels are part of the Phase IV of KOTC’s fleet newbuilding projects.

“The reason for cancellation of the tender and retendering is less than expected participation by only two shipyards, Jamil Al Ali, KOTC manager fleet newbuilding projects group, told Seatrade Maritime News in an exclusive interview.

“When you talk about VLGCs for LPG transportation, the number of yards with the capability and track record to build these ships is quite limited as compared to other vessel types. From the ones, which are capable, only two Korean companies participated. With re-tendering, KOTC expects more participation from international and far eastern shipyards, with more participation from Japanese and other renowned international shipyards.

During the past nine months, shipbuilding yards are facing more challenging environment and in response to our latest solicitation of interest for this tender, eight shipyards have submitted expression of interested, including Japanese yards, Al Ali said.

The original plan for Phase-IV two VLGCs with further addition of one VLGC and one VLCC as strategic requirement and four MRs based on marketing needs.

“The tender that was floated and later cancelled is only for VLGCs. The other ones are still in the pipeline and prequalification is about to start. We are not restricting it to one geographical location. The decision to re-tender by our board was basically due to the high prices received being above the budget and much higher than expected.

Al Ali said that the market forces had led him to believe that the South Korean yards were likely to be more competitive this time round.

The postponement means that KOTC Project for VLGC’s would be delayed by approximately one year, we are looking at vessels deliveries in 2017 - 2018. There are no deliveries in the next two years,” he said.