State-owned Kuwait Oil Tanker Company (KOTC) has awarded two contracts worth more than $550m to South Korea’s Daewoo Shipbuilding & Marine Engineering Company to build new crude oil tankers.

Daewoo will build four very large crude carriers (VLCCs) and an Aframax crude oil tanker of 120,000 tonnes, equivalent to 825,000 barrels of crude oil to be delivered in 2014, according to a source close to the company.

The third deal covering four medium-range tankers of 50,000 tonnes has not been awarded yet.

Daewoo was up against rival proposals from four other South Korean ship yards and two Japanese builders. The award follows a similar $700m deal with KOTC in mid-2008 for four VLCCs. Kuwait plans to expand its fleet of tankers to 34 vessels in three phases by 2020 from 21 currently.

Three deals were tendered in January for the construction of nine crude oil tankers. Bids were originally planned for the end of February, but were delayed without reason. Bids were finally submitted in June, although the prices were not been revealed.

The prequalified firms included:

• Daewoo Shipbuilding & Marine Engineering Company Limited
• Hyundai Heavy Industries (South Korea)
• Hyundai Mipo Dockyard Company (South Korea)
• Samsung Heavy Industries (South Korea)
• Sasebo Heavy Industries (South Korea)
• Kawasaki Shipbuilding Corporation (Japan)
• Mitsubishi Heavy Industries (Japan)