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Shanghai Waigaoqiao becomes China's fifth VLCC builder

Shanghai: Capesize and aframax specialist Shanghai Waigaoqiao Shipbuilding is moving into the VLCC sector having signed a letter of intent with Singapore's Ocean Tankers for construction of four 316,000 dwt tankers.

SWS becomes China's fifth VLCC builder after Dalian Shipbuilding Industry Co. (DSIC), Nantong COSCO KHI Ship Engineering Co. (NACKS), Jiangnan Shipyard and Bohai Shipbuilding Heavy Industry.

Ocean Tankers will pay $115m per ship with the first delivery due in March 2009. The vessels are compliant with the new Common Structural Rules.

In terms of completed tonnage the Shanghai yard is China's largest, having delivered its first ship as recently as March 2003. The VLCCs will be built as SWS's Phase 2 completion is finished, scheduled for 2008, when capacity will grow there by 50%.

SWS has also recently signed further capesize contracts as shipbroker Clarksons Asia notes in its weekly report. 'SWS ... are understood to have taken another 5 capesize contracts for the end of 2009 and beginning of 2010. We understand that each of Bocimar, Geden, Alpha Tankers, K-Line and Cardiff have committed additional capes at the yard. It is significant that all of these buyers are existing clients which confirms - if confirmation were needed - the priority still granted to loyal clients. The price for all these clients is reported to be in the region of US$60m depending on the exact spec, payment and other terms,' the broker reported.  [11/07/06]

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