LNG

COSCO Shipping Energy Transportation of China has ordered three liquefied natural gas newbuilds from Hudong-Zhonghua Shipbuilding of Shanghai to take its future fleet numbers up to 44 LNG vessels.

COSCO gave details in a statement to the Hong Kong stock exchange of the payments plans for the vessels and delivery dates.

The company said that the combined price of the three vessels would be $554 million.

“The board is pleased to announce that on 7 December 2021, ‘United Auspicious LNG’, ‘United Peace LNG’ and ‘United Success LNG’ (each being a wholly-owned subsidiary of United Liquefied Gas Shipping, an indirect non-wholly-owned subsidiary of the Company) entered into the shipbuilding contracts with Hudong-Zhonghua Shipbuilding and China Shipbuilding Trading,” added the statement.

The indirect non-wholly owned subsidiary of COSCO, United Liquefied Gas Shipping, is owned 81 percent by the company and the 19 percent balance is held by PetroChina International.

Growing fleet

COSCO currently has an LNG fleet of 41 LNG carriers in total, of which 38 are in operation with a shipping capacity of 6.42 million cubic metres.

COSCO noted that its LNG shipping projects involved two subsidiaries, COSCO Shipping LNG Investment (Shanghai), a wholly-owned subsidiary, and China LNG Shipping (Holdings) of which COSCO has a 50 percent stake.

The newbuilds just ordered each have capacity of not less than 174,000 cubic metres and guaranteed deadweight of 80,000 metric tons at design draught each.

“Pursuant to the shipbuilding contracts, the consideration for each of the vessels is approximately US$185 million,” said COSCO.

“The price of each of the vessels is payable in four instalments of 10 percent, 10 percent, 10 percent and 70 percent, respectively based on the shipbuilding progress,” added the company.

COSCO said that the fourth instalment of 70 percent could be adjusted to take account of certain issues such late delivery and performance deficiencies of the vessels.

The company said the cost of the three newbuilds would be funded by the group with 80 percent bank borrowings and around 20 percent from financial resources.

“The delivery of the three vessels is expected to take place on a date no later than 30 September 2024, 31 December 2024 and 31 March 2025, respectively,” the statement concluded. 

South Korean shipbuilders have managed to overtake Chinese shipyards in the May index of orders, led by more liquefied natural gas carrier newbuild placements, while more LNG tanker orders continued to be received in June.