Hyundai Heavy Industries (HHI) has clinched a $700 million order to build 12 ships for Iran’s state-owned shipping company Islamic Republic of Iran Shipping Lines (IRISL). The deal is expected to provide financial room for the debt-ridden company.
According to HHI, Sunday, the nation’s largest shipbuilder signed a deal to build at least eight ultra-large container vessels (ULCVs) and medium-range tankers for carrying petrochemical products for the largest shipping company in the Middle East, Friday. A total of four ULCVs and six containers are expected to be built under the deal, and the capacity of the container vessels will be 14,500 20-foot equivalent units (TEU) while tankers will be 49,000 tons.
“The deal is meaningful as HHI has won its first shipbuilding order and marked its foothold for future business in Iran,” an HHI official said.
“In order to overcome the order cliff, the company will do its best to seek similar deals in overseas markets.”
The ships are expected to be delivered in mid-2018.
“The ULCVs that have been ordered to be built will be the first of a new generation of vessels that Iran will acquire,” IRISL said in a statement.
The deal is the first major international contract Iran has signed after the removal of financial sanctions in January, and HHI expects this deal to signal further deals with the Persian country, HHI said.
Iran has the world’s second-largest proved gas reserves after Russia and the third-highest natural gas production in the world after Indonesia and Russia. It also ranks fourth in oil reserves with an estimated 153.6 billion barrels.
Apart from the deal with IRISL, HHI also won another shipbuilding contract worth 700 billion won with the government, the shipyard added.
Under the deal, the shipyard is expected to build one patrol ship and one submarine.