China’s Cosco Shipping Energy to Expand Fleet With 40 VLCCs by 2030

Detailed summary

The China Cosco Shipping subsidiary will add 10 green energy powered VLCCs by the end of 2030 at a cost of CNY9.5 billion (USD1.4 billion), according to announcements made this…

(Yicai) Nov. 12 -- Cosco Shipping Energy Transportation plans to expand its fleet of very large crude carriers by 40 vessels over the next four years amid an aging global VLCC fleet, tight medium- to long-term oil tanker capacity, and a buoyant deep-sea shipping market.

The China Cosco Shipping subsidiary will add 10 green energy powered VLCCs by the end of 2030 at a cost of CNY9.5 billion (USD1.4 billion), according to announcements made this week.

Six will be built by affiliate Cosco Shipping Heavy Industry for CNY5.7 billion (tax included), and the rest by China State Shipbuilding’s Dalian shipyard for CNY3.8 billion (tax included). Deliveries are scheduled for between the second half of 2029 and the end of 2030, and payment will be in Chinese yuan.

Cosco Shipping Energy will charter the other 30 VLCCs. Fourteen will be newbuilds owned by six bank-affiliated financial leasing companies, including 10 powered by green energy and the rest using conventional propulsion. The 20-year rental cost for the 14 should be no more than CNY17.4 billion (USD2.6 billion), the Shanghai-based company said.

The remaining 16 vessels will be newbuilds chartered from Cosco Shipping Energy’s affiliate Cosco Shipping Development. Powered by green methanol or liquefied natural gas, they will be built by China State Shipbuilding’s Dalian yard. No costs were disclosed for these.

By adding scarce VLCC capacity, expanding its fleet, and improving its structure, Cosco Shipping Energy will enhance its service capability and market share in the crude oil deep-sea shipping market, the company pointed out. In addition, this will help strengthen profitability and align with the global shipping industry’s decarbonization drive.

After rising by as much as 2.3 percent earlier today, Cosco Shipping Energy [SHA: 600026] closed 1.5 percent lower at CNY16.71 (USD2.51) per share.

Cosco Shipping Development is the industrial-financial platform of Shipping giant Cosco Shipping Group.

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