South Korean shipping company Pan Ocean has decided to order five open hatch wood chip carriers as the company secured a long-term shipping deal with Brazil-based pulp and paper firm Fibria.

In a stock exchange filing, Pan Ocean said it would spend up to KRW165.4bn (US$146.6m) for the newbuildings contract.

Although the details of the order were not unveiled, the company informed that the construction of the new ships would start in late December 2018 and be finalized in September 2020.

The KRW719.6bn shipping deal inked between the parties would see Pan Ocean provide its services to Fibria over a period of a minimum of 15 years.

The transportation deal, set to come into force in February 2019, is scheduled to last until March 2035.

Pan Ocean added that the parties have an option to extend the shipping deal by up to 10 years.