US$1.1b tanker joint venture to boost China's energy shipping capacity
Two state-owned tanker giants are setting up a joint venture in a US$1.1 billion deal that could pave the way for the world's top crude consumer to eventually become self-reliant in importing oil through ocean transport.
Two state-owned tanker giants are setting up a joint venture in a US$1.1 billion deal that could pave the way for the world's top crude consumer to eventually become self-reliant in importing oil through ocean transport.
Shanghai-listed and Hong Kong-based China Merchants Energy Shipping (CMES) said in a stock exchange filing it was partnering with Sinotrans & CSC.
CMES is injecting its 19 supertankers and cash, taking a 51 per cent stake in the new venture. Sinotrans & CSC will pay US$565.9 million cash for its share of the venture.
The proposed entity will specialise in the operation of very large crude carriers, each capable of carrying 2 million barrels of crude.
Sinotrans & CSC, with its main energy shipping subsidiary Nanjing Tanker, is ranked as the world's ninth-largest VLCC operator by live fleet size, according to Clarksons Research Service. CMES is in 22nd place.
Opportunities for independent tanker owners will become really limited
The statement did not say whether the joint venture will take over 19 other VLCCs from beleaguered Nanjing Tanker, which was delisted from the Shanghai exchange in June after posting four consecutive annual losses.