The shipping company Cosco Shipping Energy Transportation is expanding its fleet with 24 VLCC-class tankers. The company is purchasing ten newbuilds for over $1.4 billion, whilst a further 14 are being chartered on long-term contracts.
Cosco continues to grow. Following orders worth billions for new container ships and bulk carriers, the tanker segment has now followed suit. Cosco Shipping Energy Transportation is set to receive a total of 24 new vessels, more than half of which will be under charter agreements.
According to the shipping company, the ten new-build purchase contracts are worth 9.48 billion RMB ($1.42 billion). Six of the vessels will be built at the Yangzhou Cosco Shipping Heavy Industry shipyard, whilst the remaining four will be constructed by the Dalian Shipbuilding Industry Corporation. According to reports, the price per vessel is approximately $142 million, with deliveries scheduled for 2029 to 2030.
One interesting aspect is the propulsion strategy that Cosco is pursuing for the newbuilds: the Yangzhou vessels are to be capable of running on LNG, whilst the four ships from the Dalian shipyard can be retrofitted at a later date to a dual-fuel propulsion system for LNG or methanol.
A total of 14 further newbuilds are to be taken on under long-term bareboat charter agreements: Cosco states that the term is 20 years. The programme is being managed through the subsidiary Huanyu Shipowning and involves six finance leasing companies from China. Cosco has committed to charter payments totalling a maximum of $2.61 billion. Ten of the vessels are LNG dual-fuel VLCCs, whilst the remaining four will be powered by conventional fuels. The entire fleet is set to enter service with Cosco from 2030.
The tanker operator’s order book could potentially grow even further. The company’s board recently approved a further proposal involving leasing and financing agreements for 16 VLCC tankers. However, the shipping company has not yet provided any details regarding the financing, the shipyards commissioned or the value of any contracts; further details are to follow.
