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Michael Jorgensen, cfo and acting ceo of Oman Shipping Company

Oman Shipping orders new VLCC pair, eyes expansion in bulkers and containers

Oman Shipping Company (OSC) is eying an ambitious fleet expansion plan after it ordered two eco-friendly newbuild VLCC at South Korea’s Daewoo Shipbuilding & Marine Engineering (DSME).

The newbuildings are expected to be deployed in the spot market, as OSC plots further fleet expansion in the bulk and container sectors, according to Michael Jorgensen, cfo and acting ceo of OSC.

“The new additions to OSC’s VLCC fleet will be amongst the most technically advanced in the world,” said Jorgensen. “They will form a key part of our expansion plan over the coming years as we prepare for further investment in oil and product carriers in 2019/2020, particularly in the bulk and container market.”

The next-generation eco-friendly vessels will add to OSC’s expanding fleet of 49 ships including 16 VLCCs, 17 product tankers and four chemical tankers.

The new 300,000-dwt VLCCs are scheduled to be launched from DSME’s Okpo shipyard in the last quarter of 2020.

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“The newbuild VLCC project will involve the very latest eco-friendly technology to meet and exceed the environmental regulation standards of the International Maritime Organisation. Key elements of the next generation design include highly-efficient engine and fuel-saving technologies. They will also be outfitted with open loop scrubbers bringing addition environmental benefits while also addressing new SOx, NOx environmental regulations effective from 1 January 2020,” Jorgensen said.

“The investment comes as OSC continues to report strong growth following long-term deals with local refineries and traders. Our crude oil and product vessel portfolio accounts for more than half of the company’s national fleet. The latest expansion is a further reflection of the significant upturn in liquid cargoes, including crude, refined petroleum fuels and petrochemicals, being generated by Oman’s largely hydrocarbon-centric economy.

“Much of the recent growth has been underpinned by major industrial and petrochemical clusters established at Sohar, Salalah and Duqm. Recent investments in mega refining and petrochemicals schemes in these clusters well for the further growth of OSC’s shipping capacity,” he shared.

Read more: Oman new maritime law to be ready in 2019

Jorgensen added that significant growth is also being driven by a new VLCC ‘spot-chartering’ desk which secured more than 100 fixtures with global oil majors in its first 20 months of operation. This includes new contracts with oil majors and traders.

In the domestic market, OSC’s growth is being driven by a 20-year contract to transport condensate for ORPIC (Oman Oil Refineries and Petroleum Industries Company) and a 15-year deal transporting methanol for OTI (Oman Trading International) from Salalah Methanol plant.
The company is further supporting the export of LPG from Sohar Refinery to Yemen, Sudan, India, Bangladesh and Sri Lanka.

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