The state-owned oil transportation group has signed a letter of intent with South Korea’s Daewoo Engineering and Construction to build four VLCCs at a cost of $700m. The two companies will sign a contract on 21 August, with the ships scheduled to be delivered in 2011.

The company plans to renew its fleet of ships over the coming decade, and will issue a tender in September to build two tankers for petroleum products. The company says it also aims to build another nine tankers by next year.