Cosco Shipping Energy Transportation LNG order for Arctic LNG goes to Korea’s DSME

Tuesday, 02 February 2021
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LNG News Editor: 

Cosco Shipping Energy Transportation, the biggest Chinese owner and operator of oil and gas vessels and with a growing number of over 40 liquefied natural gas carriers in its fleet, has approved an investment in three LNG carriers for the Russian Arctic LNG II project of Novatek and its partners.

Cosco Shipping said it would invest $923 million for the construction of the vessels in a joint venture with Mitsui OSK Line of Japan.

Japan investment

The Japanese are prominent investors in Arctic LNG II companies through Mitsui & Co. and the government institution, the Japan Oil, Gas and Metals National Corp.

China National Petroleum Corp. and units of China National Offshore Oil Corp. are also shareholders in the newest Russian Arctic project to produce over 20 million tonnes per annum of LNG.

A joint venture company of Cosco Shipping and MOL has signed shipbuilding contracts with the South Korean shipyard Daewoo Shipbuilding and Marine Engineering for the three newbuilds, each with 172,500 cubic metres of capacity.

Cosco Shipping currently has a total of 41 jointly-owned LNG vessels, including 38 LNG carriers in operation with aggregate capacity of 6.42 million cubic metres and three LNG vessels under construction with combined capacity of 522,000 cubic metres.

The Chinese shipping line currently has stakes in ships such as the 172,600 cubic metres capacity “Boris Brusilov”, the 172,600 cubic metres capacity “Rudolph Samoylovich” and the 174.100 cubic metres capacity “Cesi Wenshou”.

Others in the line are the 174,000 cubic metres capacity vessels, “LNG Dubhe”, the “Pan Europe”, the Pan Africa” and the “LNG Merak”.

The Cosco Shipping company owns 50 percent each of two other subsidiaries Cosco Shipping LNG Investment (Shanghai) Co. and China LNG Shipping (Holdings) Limited (CLNG).

Cosco Shipping and the huge Chinese equity firm, the Silk Road Fund, entered into an agreement with Russian shipping line Sovcomflot and gas project developer Novatek to establish the joint venture, Maritime Arctic Transport, to manage an icebreaking fleet of Arctic ice-class vessels to serve Novatek's Yamal LNG, Arctic LNG II and other potential projects.

Cosco Shipping was set up in Shanghai in 2016 with the aim of leading China’s seaborne energy transportation.

The parent company is China Cosco Shipping Corp. Ltd, a merged entity from the energy transportation arms of China Ocean Shipping Co. and China Shipping Co.

Another 15 ice-breaking LNG carriers have been ordered by Sovcomflot from Zvezda Shipbuilding in the Russian Far East and will also serve the Arctic LNG II project.

The Zvezda complex is located at Bolshoi Kamen on the coast of the Sea of Japan and about 12 miles northeast of the city of Vladivostok.

The first LNG carrier of the series was ordered directly by Sovcomflot, while the other 14 vessels were ordered by Smart LNG, a joint venture of Sovcomflot and Novatek.

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