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25 February 2024

Gem awards Samsung Dh585m tanker contract

By Ashaba K Abdul Basti


Gulf Energy Maritime (Gem), the Middle East’s largest independent commercial product tanker operator, has awarded South Korean Samsung Heavy Industries (SHI) a Dh585 million contract to build two high specification double-hulled Aframax tankers.


The Aframax tankers, Gulf Vision and Gulf Valour, will be delivered by the end of 2011 in what is Gem’s first Aframax order to add to its growing fleet expected to reach 19 vessels by next year.


Over the past few years, Gem has invested Dh4 billion in new ships to be delivered by 2009. The two new vessels will be fully coated with a capacity of 114,700 DWT each and are of Long Range Two specification.


“Our existing fleet consists of product and chemical tankers ranging from MRs to Panamax. On a scale of progression, our business strategy makes sense when we buy coated Aframax vessels.


“Demand after 2011, when these two Aframax vessels will be delivered by Samsung, will be for these type of vessels,” CEO Ahmed Essa Hareb Al Falahi told Emirates Business.

Gem is currently using its own equity for expansion programmes and hopes to pursue banks for loans only at a much later stage to fund future expansion. Al Falahi said there was no open bid for the deal but Gem closely negotiated with two Korean shipyards that have available building slots towards 2011 and the decision was based on research, business viability and its existing relationships with South Korean shipyards.


“We had to ensure we build them at a yard that has a track record of constructing similar ships and on right commercial terms and, after extensive consultations, we settled for SHI,” he said.


The new tankers will be state-of-the-art and will meet environment safety requirements for double-hulled ships. The two vessels will join the Gem fleet, which currently comprises 11 panamax and chemical/product tankers and another eight, which will be delivered before the end of 2009.


Al Falahi said the company orders ships based on requirements adding that he does not rule out new orders this year. However, he said, the two Aframax together with the current fleet are enough for existing demand.


Gem registered 53 per cent growth last year compared to 2006 and has grown by 400 per cent since its inception more than three years ago. It is hoping for positive returns from its fleet although it does not expect any deliveries until the end of 2008.


Al Falahi said the Middle East tanker industry has seen reasonable growth, which will continue throughout this year due to increasing demand to transport crude and refined products.


Regional oil refineries are stepping up their production to meet rising demand with projects valued at Dh446bn due for completion in 2013.