$410 million! Hyundai Mipo Dockyard wins order for 10 product tankers

2020-08-21 09:00

Bahri, the Saudi Arabian national shipping company, announced the signing of a contract with Hyundai Mipo Dockyard for the construction of 10 MR product tankers, valued at $410 million.

In a virtual ceremony, Bahri CEO Abdullah Aldubaikhi and Hyundai Heavy Industries Group COO and Senior Executive Vice President Seung-Yong Park jointly signed the contract. The new vessels are expected to be delivered between the first quarter of 2022 and the first quarter of 2023, built to the highest environmental, fuel efficiency, and safety standards.

Bahri CEO Abdullah Aldubaikhi said: "Bahri is committed to contributing to the maritime goals set in Saudi Vision 2030 and is keen to continuously strengthen its state-of-the-art, large multi-purpose fleet. The new agreement with Hyundai Mipo Dockyard marks a major step forward in our next growth phase and further strengthens our leading position in the global shipping industry. With the new vessels joining our fleet over the next two years, we will be better positioned to meet the diverse needs of our customers worldwide."

In the first half of this year, foreign media reported that Bahri would order 6+4 50,000-dwt product tankers and had contacted Hyundai Mipo Dockyard and New Times Shipbuilding. At that time, the market generally predicted that New Times Shipbuilding would win the order, but Bahri ultimately chose Hyundai Mipo Dockyard and signed a related letter of intent with Hyundai Mipo Dockyard in June.

Some analysts believe that the good relationship between Hyundai Mipo Dockyard's parent company and Bahri increased the likelihood of Hyundai Mipo Dockyard winning the bid. Bahri, Saudi Aramco, and Hyundai Heavy Industries Group have jointly invested in International Marine Industry (IMI), the largest shipbuilding company in the Middle East. Last September, Bahri ordered a VLCC from IMI, which will be subcontracted to Hyundai Heavy Industries Ulsan shipyard. Hyundai Heavy Industries will also provide IMI with ship design and construction technical guidance. At the same time, Bahri and Hyundai Heavy Industries Group are jointly developing technology in the field of smart ships.

The long-term cooperation between Bahri and Hyundai Heavy Industries Group also helped Hyundai Mipo Dockyard win the order. Including the latest order, Hyundai Heavy Industries Group has built 61 different types of vessels for Bahri. In 2015, Bahri ordered a total of 34 vessels from Hyundai Samho Heavy Industries, including 10 VLCCs. In addition, Bahri has also ordered 17 MR product tankers from Hyundai Mipo Dockyard, and most of Bahri's product/chemical tankers are built by Hyundai Mipo Dockyard.

MR product tankers built by Hyundai Mipo Dockyard

Hyundai Mipo Dockyard's strong technical capabilities in the construction of MR product tankers are undoubtedly an important reason why Bahri chose this shipyard. MR product tankers are Hyundai Mipo Dockyard's main advantage and it holds a leading position in this market with about 50% market share.

It is understood that Bahri owns about 30 product/chemical tankers, managed and operated by its subsidiary Bahri Chemicals. Its fleet includes 46,000-dwt MR chemical tankers and 50,000-dwt MR chemical tankers. Bahri Chemicals is headquartered in Dubai and its customers include Saudi Aramco, Sabic, Vitol, Trafigura, Shell, Sinopec, and PetroChina.

Clarkson's data shows that Bahri's fleet currently operates 86 vessels with a total capacity of approximately 15.05 million dwt, mostly crude oil tankers and product tankers, as well as a small number of bulk carriers and ro-ro vessels. Bahri also has 4 new vessels under construction, including a 319,000-dwt VLCC being built by Hyundai Heavy Industries, scheduled for delivery in 2021; and 3 80,000-dwt bulk carriers being built by Hyundai Mipo Dockyard's Vietnamese subsidiary Hyundai Vinashin Shipyard, scheduled for delivery in the next two years.

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