Wah Kwong Maritime Transport Holdings is to step up its presence in the VLCC sector with its first newbuilding contract for nearly a decade.
The Sabrina Chao-led company has joined forces with CSIC Leasing to order two 307,000-dwt crude tankers at Dalian Shipbuilding Industry Co (DSIC). The deal does not include any options.
Wah Kwong confirmed the joint venture with CSIC Leasing, with the VLCC newbuildings part of the second strategic cooperation it has signed with the Chinese financing firm.
The first was sealed last November when the two companies agreed to integrate the firms’ mutual interest in future projects that cover shipbuilding, leasing, joint investments and asset management.
Wah Kwong has not disclosed the price for the two VLCCs but shipbuilding players say Chinese shipyards are looking for around $85m for a scrubber-fitted vessel.
TradeWinds understands that CSIC is slated to deliver the pair during the first half of 2021.
South Korea dominates
Chinese shipyards are presently the second-largest builders globally of VLCCs, a ship type where South Korea is dominant.
Data from Clarksons showed 20 VLCCs being built in China up to the end of May, out of a global orderbook of 85.
By contrast, 49 of the tankers are being constructed in South Korea, with the remaining 16 being made in Japan.
Wah Kwong currently owns the DSIC-built, 297,000-dwt VLCC Trikwong Venture (built 2012). It jointly owns the Shanghai Waigaoqiao Shipbuilding-constructed, 318,000-dwt Hong Kong Spirit (built 2013) with Teekay Corp of Canada.
The Hong Kong shipowner has not invested in VLCC newbuilding tonnage for almost a decade. The Trikwong Venture was the last tanker it ordered.
While Wah Kwong may not have spent on new VLCC tonnage, the company has stayed active in the shipbuilding market and invested in aframax tankers, ultramax bulkers and kamsarmax bulkers.
The company has developed a plan known as Wah Kwong Lite.
Under the strategy, it is looking to develop new asset-light businesses, including the provision of integrated management solutions to strategic partners who require support in newbuilding supervision, operational, technical and commercial management.
