A joint venture between PetroChina and Cosco Shipping Energy Transportation (CSET) has signed its planned order for three LNG carrier newbuildings worth $554m at Hudong-Zhonghua Shipbuilding (Group) in Shanghai.
The 174,000-cbm vessels, priced at about $185m each, are due for delivery in October 2022 and January and April 2023 respectively.
In an exchange filing, Shanghai and Hong Kong-listed CSET said the vessels will be chartered to PetroChina International — a wholly owned subsidiary of PetroChina — for at least 20 years.
“The entering into of the shipbuilding contracts is in line with the development strategy of the group for its business of LNG transport,” CSET said.
“The construction of the vessels will allow the Group to expand the scale of its LNG fleet and capitalise on the recent positive market environment of LNG trading and the consequential growing market demand for LNG transport.”
When the latest order is taken into account, CSET — part of state conglomerate China Cosco Shipping — will have stakes in 36 LNG carriers in operation and five on order.
The newbuildings will be owned by United Liquefied Gas Shipping, 60% owned by CSET’s subsidiary Cosco Shipping LNG Investment Co (Shanghai LNG).
PetroChina International’s shipping arm, Glasford, takes 19%. The remaining 21% is owned by Cosco Shipping Petroleum.
TradeWinds reported in late April that CSET and PetroChina were teaming up on the LNG newbuildings.
At the time, CSET said the two companies will form an LNG venture with registered capital of $126m to take on the three newbuildings.
The newbuildings have been some time in the making. Contracts were originally due to be inked last year but the business was delayed and then derailed by the Covid-19 outbreak.
In the interim, Hudong-Zhonghua has boosted its LNG carrier tally by securing 16 berth reservation slots for vessels worth $2.85bn from Qatargas, which blocked off up to 155 newbuilding berths at Chinese and South Korean yards.
The China State Shipbuilding Corp-controlled yard may also be in line for additional LNG newbuildings from Russia's Novatek as part of the vessels being secured for the Arctic LNG 2 project.
