Pan Ocean (028670), Korea’s largest bulk carrier operator, has signed a 20-year long-term crude oil transport contract with SK Energy and SK Incheon Petrochemical, the company said in a regulatory filing Tuesday.
The contract is valued at 2.4711 trillion won, equivalent to 45.5% of the company’s revenue of 5.4328 trillion won last year.
In May, Pan Ocean had ordered four very large crude carriers (VLCCs) from Hanwha Ocean (042660). That contract was worth 783.4 billion won. With the move, Pan Ocean can shift away from its existing business structure centered on dry bulk carriers and expand its fleet with VLCCs, strengthening its competitiveness in transporting liquid cargo (wet bulk) such as crude oil and gas.
The latest transport contract was signed to bring Middle Eastern crude oil into Korea using the four VLCCs ordered by Pan Ocean. The contract term runs for 20 years from September 2029, when the vessels are scheduled to be delivered.
Source: Seoul Economic Daily