Iran Charters 550,000 ULCC

Iran has chartered a 555,000 dwt ULCC for floating oil storage to replace two VLCCs, tanker brokers said. The 1979-built Sea Giant is scheduled to be delivered in mid November for stationing off Kharg Island to replace the VLCCs Mountain Cloud (285,000 dwt) and Union (275,000 dwt) which will apparently be redelivered. The Sea Giant has been taken by the National Iranian Tanker Company (NITC) at around $15,750 a day on a monthly basis for up to 150 days, brokers said. After chartering a number of vessels over the summer NITC now has a fleet of 14 vessels, four of which are its own, with a combined storage capacity of around 5.24 million tons. Iran is storing oil to comply with OPEC production cutbacks because it is difficult for it to reduce production at its ageing oilfields, according to analysts. At an average charter rate of about $10,000 per ship for the ten vessels, Iran would be incurring storage costs of about $100,000 a day. The Union was redelivered at the beginning of this month and the Mountain Cloud would be redelivered on November 15.