PNSC on $50 million oil tankers buying spree

KARACHI: State-run Pakistan National Shipping Corporation (PNSC) will place an order for two used mid-sized oil tankers at an estimated cost of $50 million, a senior official said on Tuesday, as the shipping line plans to increase its fleet to cater to the demand; following steep drop in oil prices.
“PNSC will soon float a tender for purchasing either two Long Range 1 (LR1) oil tankers or one Aframax oil tanker,” Arif Elahi, chairman of PNSC told The News. “The vessels would not be more than 10 years old … it was to be built in between 2005 to 2007.”
The estimated cost for two LR1 tankers is around $50 million and an Aframax would cost in between $35 million to $40 million.
He said PNSC is all set to capture the depressed oil market and might also get an old oil tanker for storing oil, as it is being done by many countries, which are taking the advantage of the depressed crude prices and buying oil tankers for storage.
“We have an oil market and we are not being able to cater yet so we are trying to improve our oil fleet and in later stage will see in the containerised vessels,” the chairman said.
Elahi said the company will raise loan from banks to buy new tankers and it also has surplus fund to “pay around 20 percent of the down payment.” “However, we are trying to get financing from EXIM Bank, World Bank or ADB (Asian Development Bank).”
He said the country’s largest shipping company currently operates a fleet of nine vessels, including five bulk carriers and four oil tankers and will need to add new vessels to grow with the market.
“PNSC annually handles 650,000 deadweight tonnages (DWT) and with the inclusion of new tankers, it will be able to handle 800,000 DWT.”
The chairman said the company’s three of five bulk carriers are in losses due to the fall in the International Baltic Dry Index, which has slow down the country’s Baltic trade.
Elahi said the company is also focusing to increase its voyages by improving turnaround time. The PNSC is also looking to invest in the port infrastructure and install new and improved oil discharge facilities at Karachi Port Trust.
“We are also working to sort out a plan to cut down the oil testing time and planning to get the oil testing done at Dubai,” he added. “By minimising our turnaround time, we can do extra voyages and can improve tour income by $10million.”
Elahi while sharing his turnaround plan for the company admitted that “to run a public organisation one has to break the status quo and come out of its comfort zone and face the challenges of the current business trends.” “It is important for a public sector to improve its image and make it more efficient,” he added.
“At PNSC we are trying to be more optimistic and to compete in the shipping business we have to come out of the conventional business trends.”
Elahi said PNSC is setting up an exclusive a marketing department, which will focus only on to get more business and work.