Berlian Laju Tanker to buy six VLCC to strengthen offshore service

Local shipping firm PT Berlian Laju Tanker plans to place order for the construction of six very large crude carriers (VLCC) to strengthen its armada following the government?s plan to apply cabotage principle starting next year, Suara Karya reported on Thursday.

Company President Director Widihardja Tanudjaja said the firm will invest US$430 million for the construction of the six vessels, that is expected to last from 2010 through 2012.

?Vessel price is on declining trend now due to the global economic crisis. It?s time to invest,? he said.

Under the Presidential Decree No. 5/2005, all commodities transported inside the country should be delivered using Indonesian-flagged ships starting next year. The policy is known as ?cabotage ? in the shipping industry.

Widihardja believed the implementation of the cabotage principle will bring a lot of opportunities for the firm, citing for instance that the oil owned by state oil and gas firm PT Pertamina is now transported by among others 50 foreign-flagged vessels.

Berlian Laju now has 89 vessels with an average age of 12 years, much lower the maximum 25 years set by international rule.

The firm has obtained 20-year contracts to carry LNG from the Tangguh LNG plant using two tankers each with the capacity of 300,000 cubic feet gas. None of the tankers have started transporting the LNG.

Company corporate secretary Peter Chayson said there will be a strong need for Indonesian-flagged vessels over the next five years following the implementation of the cabotage principle since the country?s mining and oil and gas companies now mostly still use foreign-flagged ships. (*)