China Shipping Venture Decided to Order 6 LNG Vessels for $1.2 Billion

By Finance

China Shipping Development Co. (1138)’s venture decided to order 6 liquefied natural gas tankers at the price of $1.2 billion. China needs cleaner fuel and the liquefied natural gas has to be transported.
LNG transportation business will expand and will bring new profit growth. A 20-year shipping contract will give stable earnings for the company signed this contact. China is the biggest energy consumer in the world and has the intention to use more natural gas in order to become more independent from coal and oil. Each of the ships in the order will be able to transport 174,000 cubic meters of natural gas. The price for a single ship will be about $205 million and the deal will be financed with syndicated loans.

Hudong Zhonghua Shipbuilding Group Co., the only Chinese shipyard that has built LNG tankers, will make the 6 vessels. China Shipping is also has the intention to built 4 more ships and is negotiating with two Chinese shipyards for the deal.
China Shipping, the crude and dry-bulk carrier of the nation’s second-largest shipping company, had earlier ordered four LNG carriers from Hudong Zhonghua through its venture with Mitsui.