Logistics

Saudi shipping company signs $1bn tankers deal

August 20, 2024, 10:26 AM

Saudi tankers deal Bahri — A VLCC tanker in Rotterdam. Bahri has signed a $1bn deal to buy nine such ships

Bahri buying 9 oil tankers
Delivery by end of Q1 2025
Old ships to be phased out

National Shipping Company of Saudi Arabia (Bahri) has announced a SAR3.75 billion ($1 billion) deal to buy nine tankers from Greek company Capital Maritime and Trading Corporation.

The very large crude carriers (VLCCs) will be used by Bahri to deliver crude cargoes for its customers.

VLCCs are a crucial part of the global maritime logistics system, moving large amounts of unrefined crude oil from extraction locations to refineries worldwide.

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Bahri will pay an initial 10 percent on the signing of the purchase agreement, with the remaining 90 percent due on delivery of the vessels. The company is scheduled to receive them “in multiple batches” before the end of the first quarter in 2025, according to a Tadawul filing.

The majority of the nine VLCCs were built in South Korea, with an average age of around six years.

The deal will be financed by a mixture of banking facilities and internally generated funds, according to a company statement.

Bahri’s oil transport business unit currently operates a fleet of 40 VLCCs. The new deliveries, which have an average deadweight tonnage (DWT) of around 311,500, will involve older vessels being phased out.

Saudi Arabia’s Public Investment Fund owns a 22.5 percent stake in the shipping and logistics provider, with another 20 percent owned by oil major Saudi Aramco. The remaining shares are held by Saudi nationals, according to the company’s website.

Bahri reported a 48 percent year-on-year increase in net profit for the second quarter of 2024 to SAR733 million and a 20 percent rise in half-year profits to SAR1.19 billion.