China Merchants Energy Shipping signs a package contract for three LNG vessels

2014-07-09 09:00

The Yamal LNG project seems to have become the focus of the recent international shipping market, and Daewoo Shipbuilding has clearly become the main player in the spotlight, although it seems that financially strong Chinese shipowners are also involved.

On the evening of July 8, COSCO SHIPPING Development Co., Ltd. issued an announcement regarding the signing of a comprehensive contract for the Yamal LNG transportation project by its joint venture company. The announcement stated that three single-ship companies in which the company indirectly holds 50% of the shares signed a comprehensive contract (agreement) for the Yamal LNG transportation project with relevant parties, including five types of contracts (agreements): shipbuilding contracts, chartering contracts, ship supervision contracts, ship management contracts, and supplementary shipbuilding contracts.

The shipbuilding part of the agreement mainly shows that the three single-ship companies will jointly build three (one for each company) 172,410 cubic meter ARC 7 ice-breaking liquefied natural gas carriers ( ship type shipyard transactions ) (LNG carriers), building three LNG vessels The total cost of the three vessels is approximately US$932 million, which will be paid to the shipyard by the shipowners in five installments. The three vessels are expected to be delivered on or before March 31, 2018, December 31, 2018, and December 31, 2019.

The shipbuilding contract stipulates that the shipyard will build and deliver the vessels to the shipowner in accordance with the terms of the shipbuilding contract. After the initial acceptance of each vessel is passed, the shipyard will be responsible for arranging the vessel's ice area sea trial. Only after passing the sea trial can the vessel be finally delivered.

The agreement shows that after the three vessels are built, they will be chartered to Yamal Trade Company (YAMAL TRADE PTE LTD) for a period from the delivery date of each vessel to December 31, 2045.

It is understood that the three single-ship companies in this contract, Arctic Blue LNG Shipping Limited, Arctic Green LNG Shipping Limited, and Arctic Purple LNG Shipping Limited, are single-ship companies established in Hong Kong by COSCO SHIPPING LNG Investment Co., Ltd. and MOL (Mitsui O.S.K. Lines, Ltd.), each with a registered capital of US$1,000, with COSCO SHIPPING LNG Investment Co., Ltd. and MOL each holding 50% of the shares.

COSCO SHIPPING Development stated that the signing of the comprehensive contract for the Yamal LNG transportation project marks the company's further expansion into the growing liquefied natural gas transportation market. According to internal calculations, the company expects to achieve positive investment returns through the equity interests of the three joint ventures in the future.

It is understood that the Yamal LNG project plans to order 16 LNG vessels, with a total price exceeding US$5 billion. MOL and Teekay will sign contracts with Daewoo Shipbuilding to build 9 170,000 cubic meter Arc7 ice-class LNG vessels, with Teekay ordering 6 and the other 3 being jointly ordered by MOL and COSCO SHIPPING Development. The remaining 7 LNG vessels will be ordered by the Russian shipowner Sovcomflot (SCF).

In 2016, South Korean shipyards will build 24,000 TEU container ships

South Korean shipbuilders' order targets for this year are essentially 'unachievable'.

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