National Shipping Company of Saudi Arabia (Bahri) has combined with Arab Petroleum Investments Corp in a new $1.5bn VLCC venture.
Bahri says the new vehicle will buy up to 15 VLCCs, a move which would give it the largest fleet in the sector.
Abdulrahman Mohammed Al Mofadhi, chairman of Bahri, said, “This fund will not only reduce Saudi Arabia’s dependence on external crude carriers but also its earnings will be reinvested in the local economy.”
Bahri has chartered 13 VLCCs in the spot market so far this year, according to Clarksons Research Services. There have been nearly 900 spot fixtures this year.
The shipowner will provide 15% of the funds and offer shipmanagement services to the joint fleet.
Arab Petroleum will provide the remaining equity and take charge of arranging any further financing.
Ibrahim Al Omar, CEO of Bahri said: “With a current fleet of 36 VLCC’s and 10 new build orders scheduled for delivery in 2017-18, the 15 crude carriers proposed for acquisition under this fund will propel Bahri into becoming the largest operator of VLCC’s in the world.”
Bahri is already the third largest VLCC owner globally with 36 of the tankers, Clarksons Research Services says.
The owner also has 10 newbuildins on order at Samho.
The shipbroker presently values a VLCC newbuilding at $87m and a resale at $86m.
Dr Raed Al Rayes, Deputy CEO & General Manager of APICOP, says the move is the company’s second shipping investment after the 2013 establishment of the APICORP Petroleum Shipping Fund.
“The Fund we are launching today will capture a unique opportunity thrown open by the recent changes in the maritime oil logistics market of the region,” he added.
