Iran says it has signed contracts with South Korea’s shipyard Hyundai Heavy Industries Company to build at least eight Ultra Large Container Vessels (ULCVs) as well as medium-range tankers for carrying petroleum products.    

The contracts were the first of their kinds that Iran has signed after the removal of sanctions in January. They were sealed between Hyundai Heavy – the world’s biggest shipbuilder – and the Islamic Republic of Iran Shipping Lines (IRISL) – the biggest shipping company of the Middle East – at a total value of above $600 million.

Iran’s original order, as earlier reported by the Wall Street Journal, comprised four ULCVs and six containers.  The exact breakdown of the order is still not clear.

The funding for the orders would be provided by South Korean banks and financial institutions, Iran’s IRNA news agency reported.

The capacity of the container vessels will be 14,500 twenty-foot equivalent units (TEU) and the capacity of the tankers will be 49,000 deadweight tonnages (DWT).

The move is expected to help speed up Iran’s overseas exports – particularly exports of crude oil as well as oil products – within the next few years.

“The ULCVs that have been ordered to be built will be the first of a new generation of vessels that Iran will acquire,” the IRISL announced in a statement.  Hyundai Heavy is expected to start delivering the vessels from the second quarter of 2018, IRNA added.

Discussions with the company over IRISL’s vessel orders had started last December.

The contracts were parts of the IRISL’s plans to renovate its fleet through a total investment of $2.5 billion, the Wall Street Journal had earlier reported.

The company operates about 115 oceangoing vessels, but many of the ships are old, have been deemed unsafe to travel and cannot be insured, it had added in its report.