KARACHI, Oct 23: Pakistan National Shipping Corporation (PNSC) on Wednesday signed a “ten-year contract of affreightment” with three local refineries for the transportation of crude oil to them.

Chairman, PNSC, Vice Admiral Tauqir Hassan Naqvi; chief executive, Pak Arab Refinery Limited (PARCO), Dr Shahid K. Haq; managing director, National Refinery Limited (NRL), Qaiser Jamal; and general manager and chief executive, Pakistan Refinery Limited (PRL), Syed Viqar Salahuddin, signed the agreement on behalf of their respective companies.

Tauqir Naqvi told newsmen that PNSC was in the process of acquiring two second-hand oil tankers and these tankers would join the fleet within three months. PNSC will invest money for its own tankers ensuring safe and timely transportation.

Under the agreement, PNSC tankers will bring around seven million tons of crude oil for these three refineries in which the share of NRL stands at 4.1m tons followed by 2.75m tons for PARCO and 0.5m tons for PRL.

The PNSC chief, however, declined to give details regarding the cost of two oil tankers and the source from where these tankers would be procured. Also no details were made on the formula for freight rates with the contracting parties.

He said that each tanker would have a storage capacity of 70,000-75,000 tons of crude oil as per world standards.

Pakistan imports about seven million tons of crude oil annually, and of this 0.2m tons is transported by M.T. Johar (PNSC/NTC) and the rest through chartered vessels. Mr Naqvi said acquiring of two tankers would help in saving of foreign exchange being paid for chartering foreign vessels.

National Tanker Company (NTC), a PNSC subsidiary, has been handling import of crude oil for the last 21 years. PNSC, along with NTC, took over this task four years ago and conducted transportation on short term contract basis.

PNSC was in dire financial straits two years ago with operating loss of Rs299m in 1999-2000 and overall loss of Rs1,052m. In 2001-02, the company registered an operating profit of Rs543m and an overall profit before tax of Rs457 million.