Yangzijiang Shipbuilding has unveiled plans to turn a former Odfjell terminal in China into the country’s latest LNG import facility.
The Singapore-listed shipbuilder announced the move after taking full control of the Jiangsu Yangzi Jiasheng Terminal in Jiangyin.
Yangzijiang has acquired the 45% stake in the terminal that it did not already own from an unnamed seller for CNY 430m ($62m).
China’s largest privately owned shipbuilder acquired the original 55% stake in Jiasheng Terminal in 2019 from chemical tanker giant Odfjell for $46m.
Yangzijiang said in a regulatory filing that it intends to convert Jiasheng Terminal’s petrochemical terminal site and adjacent land in the upstream Yangtze River region to an LNG terminal facility, upon obtaining the relevant government approval.
The shipbuilder said it also intends to build LNG filing and storage facilities on land adjacent to the terminal, which it also owns.
“Together with the terminal service, the group aims to build up an integrated LNG supply chain including complete terminal service, LNG filling, storage and distribution in the upstream Yangtze River region, which will serve as an LNG logistics hub,” Yangzijiang said.
“The board is of the view that the acquisition is expected to diversify the revenue stream of the company and expand its maritime value chain through the provision of LNG terminal services as well as LNG storage and distribution.
“The potential collaborations with the LNG shipping lines and traders will allow the group to capitalise on the increasing LNG demand in the region,” it added.
While China’s LNG imports slumped last year on the government’s strict zero-Covid policy, demand is expected to rebound as soon as 2023 and continue growing over the next decade.
In 2021, mainland China emerged as the largest importer of LNG in the world, with a 20.7% share, according to Italian shipbroker Banchero Costa.
Recent months have seen a rush by China to sign new long-term LNG deals amid a push from Beijing to ensure energy security.
China has signed more contracts with US export projects than any other nation since 2021, according to Bloomberg data, and Sinopec inked one of the LNG industry’s largest deals ever with Qatar last year.
Separately, Yangzijiang has reported a 30% decline in first-half net profit following the spin-off and listing of Yangzijiang Financial Holding in April last year.
Net income for the six months to 30 December 2022 was CNY 1.4bn, versus the CNY 2.1bn achieved in the corresponding period last year.
“2022 was a remarkable year for Yangzijiang Shipbuilding as we delivered record numbers post the spin-off of our investment segment,” said chief executive Ren Letian.
“Our shipyard has hit new levels of operational efficiency with the yard delivering 71 vessels during the year.
“In addition, our R&D team has expanded our capability to build more sophisticated and greener vessels such as the LNG carrier, dual-fuel vessels with ammonia-ready tanks and methanol dual-fuel engines,” he added.
