South Korean shipping company Hyundai Merchant Marine (HMM) has signed a letter of intent (LOI) with compatriot shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME) for the construction of five 300,000 dwt very large crude carriers (VLCCs), with an option of five more vessels.
“We currently operate twelve VLCCs which have been foundational to stable profits and enhancing sales competitiveness. We thought this year is the right time to order new VLCCs at historically low newbuilding price,” Chang-keun Yoo, CEO of HMM, said.
The parties will conclude a final agreement by the end of July and they will also discuss LNG carrier engine and eco-friendly technology, according to HMM.
To finance the newbuildings, HMM will use funds from the financing package worth KRW 2.6 trillion (USD 2.28 billion) the South Korean government announced in October last year to help the country’s shipping industry.
Apart from VLCCs, HMM also plans to order small to medium sized containerships.