China’s tanker giant Cosco Shipping Energy Transportation (CSET) is buying a fleet of LPG and chemical carriers from private sister companies.
The idea is to integrate energy shipping operations and target more international business.
The Shanghai-listed company has set up a new subsidiary called Dalian Cosco Shipping Energy Supply Chain to handle the deals, which will cost CNY 126bn ($177m).
CSET already has 132 tankers and gas carriers, including 42 VLCCs and two LPG vessels, worth $5.9bn, according to VesselsValue.
It will now sign agreements with sister Cosco companies Cosco Shipping Dalian Investment and Cosco Shipping (Shanghai) to buy some of their subsidiaries.
Dalian Investment holds 70% in Shenzhen Cosco Longpeng Liquefied Gas Transportation, with six small LPG ships, 87% of Hainan Zhaogang Shipping, a 15% stake in Dalian Xizhongdao Zhonglian Port and two other LPG carriers, the 5,500-dwt sister ships Jin Gui Yuan and Mu Dan Yuan (both built 2023).
Hainan Zhaogang Shipping has four small LPG carriers of its own.
Cosco Shipping (Shanghai) controls 100% of China Shipping Chemical Transport, which owns four small chemical tankers, and Shanghai Cosco Shipping (Hong Kong), which has two 14,000-dwt chemical tankers built in 2022.
CSET said: “Integration of energy and chemical logistics supply chain is the historical mission of state-owned central enterprise listed companies to respond to the call for state-owned enterprise reform and serve the national strategy.”
The government has been encouraging and supporting companies to inject high-quality assets or equity into listed companies, it explained.
Transforming the supply chain
In total, Dalian Investment and Cosco Shipping Shanghai have invested in a fleet of 14 LPG ships, including two under construction, and 10 chemical vessels, including three time-chartered in.
“Our company has integrated resources, capital, management, technology and human resources to provide important strategic support for the safety of national energy and industrial transportation,” CSET said.
The company intends to integrate the “internal chemical supply chain” of Cosco Shipping Group and then use the advantages of its listed platform to “promote transformation and upgrading” of LPG and chemical transport.
“The company’s energy and chemical logistics chain integration is also a pre-emptive move for the national chemical transport fleet to participate in international competition,” CSET added.
Last month, CSET lined up its first solely owned LNG carriers as it diversified.
Directors approved a $509.23m order for two 175,000-cbm ships to be built at Dalian Shipbuilding Industry (Group) in China.
The deal is being handled by subsidiary Shanghai Cosco Shipping LNG Investment, which is investing in the ships through its Yuanhai LNG Investment Co unit.
