Saudi tanker giant Bahri has started to firm up its commitment to placing newbuilding orders at a new compatriot yard it has invested in.
The state-owned company announced it sealed a memorandum of understanding with International Maritime Industries (IMI) and Hyundai Heavy Industries (HHI) to build new VLCCs.
As part of the deal, Bahri will issue IMI its first order before the end of July, and IMI will subcontract the ship to HHI for construction in South Korea.
In turn, HHI will transfer its knowledge to IMI so that the new yard would be able to construct VLCCs independently in the future.
“Committed to playing a pivotal role in the transformation of the Kingdom into an important regional and global logistics and transport hub, Bahri has been exploring new horizons for industry cooperation to take its vision forward,” Bahri chief executive Abdullah Aldubaikhi said.
“This agreement…will provide a boost to our ongoing efforts aimed at enhancing our offerings and bolstering our capabilities.”
Located in Ras Al-Khair, IMI is a joint venture between Saudi Aramco, Bahri, Lamprell and HHI. Major production operations are expected to start towards the end of 2020, with the facility reaching its full production capacity by 2022.
With a capacity to manufacture four offshore rigs, over 40 vessels including three VLCCs, and service over 260 maritime products on an annual basis, the facility is poised to be the largest maritime plant in the Middle East and North Africa.
Aldubaikhi earlier said he hoped all of Bahri’s newbuilding ships can be contracted to the yard, but stopped short of making firm commitments.
The recent MoU “further strengthens the business relationship between IMI and its shareholders, as well as contributing to the development of a localized maritime industry supply chain infrastructure, technical expertise for Saudi nationals, and a track record in shipbuilding,” said IMI chief executive Fathi Al-Saleem.
As part of this MoU, HHI also agreed to increase its stake in IMI from 10% to 20%.
Separately, Saudi Aramco and HHI have agreed to establish a joint venture for an engine manufacturing and after-sales facility in Saudi Arabia.
The venture will be 55% owned by Saudi Aramco, while HHI and the Saudi Arabian Industrial Investments Company will own 30% and 15% respectively.
