Mercator hires oil carrier from Malaysian company

Mumbai-based shipping company Mercator Lines has taken a very large crude carrier (VLCC) for time charter for two years from a Malaysian company, in a move that could boost tanker business.

Sources close to the development said this VLCC, that will join Mercator Lines' fleet mid-January 2007, will earn $37,000 a day.

The company, which is already owning a VLCC, will be able to secure a large position in the tanker market.

Company executives were not available for the comment.

However, sources said, the company, through its Singapore subsidiary, has firmed up its decision to acquire more tankers to consolidate its position in the tanker business.

Meanwhile, Mercator Lines has forayed into chemical tanker business by chartering three tankers. Mercator, primarily a tanker company, had forayed into dry bulk business a year ago.

International Maritime Organisation (IMO) made it compulsory that edible oils, that is carried by product tankers, should be transported by chemical tankers from January 2007.

"Mercator has chartered two vessels of 11,000 dead weight tonne (DWT) and one with 20,000 DWT. The charter period is for five years and these brand new vessels will be delivered by 2007 and 2008," sources said.

At present, the Shipping Corporation of India (SCI) has two chemical tankers and Chennai-based Sanmar Shipping has one tanker.

Earlier, Mercator Lines has executed a Memorandum of Agreement (MOA) to acquire a 1998 built double hull Aframax Tanker of about 1,10,000 DWT and this is expected to join the fleet of the Company in the month of December 2006.

Mercator Lines, through its fully owned subsidiary Mercator Lines (Singapore), signed a Memorandum of Agreement for acquiring two Dry Bulk geared Kansarmax Vessels of about DWT 84,000 each for $122 million.

The vessels are expected to join the fleet of the company in January 2007 and June 2007.